Trend in foreign ownership of J-REIT units

Purpose This study examines trends in the foreign ownership ratio of Japanese real estate investment trusts (REITs) from 2014 to 2023. Using panel regressions, it explores how firm characteristics, macroeconomic factors and policy interventions shape foreign investment patterns, offering insights for managers, investors and policymakers. Design/methodology/approach Using panel regression (fixed and random effects) on 33 J-REITs, this study analyses firm-level, asset type, sponsorship and macro-financial factors as well as the impact of inclusion in the FTSE EPRA/NAREIT Global Index effect on foreign ownership. Findings Market capitalization, yen appreciation, hotel sector exposure and global index inclusion are positively associated with foreign ownership, whereas higher leverage, Bank of Japan J-REIT purchases, stronger ROA, higher policy rates and logistics sector exposure are negatively associated. Practical implications The findings provide actionable insights: for investors, market size, sector and index inclusion signal liquidity and accessibility; for J-REITs, asset risk–return characteristics, sector choice and leverage discipline matter; for policymakers, index engagement and monetary policy influence foreign capital flows. Originality/value To the best of our knowledge, this is the first study to apply panel regression to foreign ownership of J-REITs, highlighting sectoral and macro-financial drivers and providing evidence from the world's third-largest REIT market.