Report: Firms explore Nomura deal

The Tokyo-based financial conglomerate is reportedly considering the sale of its real estate unit alongside other businesses, with interest coming from KKR, TPG and Fortress.

Nomura Group is evaluating the sale of its real estate business Nomura Real Estate Holdings, according to a report by the Financial Times.

While no official sale process has been instigated, the FT cited sources familiar with “preliminary talks” with private equity firms including Kohlberg Kravis Roberts and TPG Capital with a view to offloading the real estate division alongside other units including Nomura Research Institute, its consulting, information technology and research arm.

Nomura’s real estate investment management and development businesses manage more than ¥1 trillion (€9.66 billion; $12.9 billion) alone. Indeed, in another report by Reuters, it was suggested that a single buyer would find it difficult acquiring the Tokyo-based financial conglomerate’s entire real estate operation in one go.

Offering Fortress Investment Group as another potential suitor, Reuters added that the investment management platform within Nomura real estate might also compliment one of Japan’s development businesses.

According to the FT’s report, Nomura has come under pressure to “boost its capital base” to help it realise its ambitions of becoming more of a global-reaching business. It announced last month it would cut $1.2 billion of costs as it sought to keep its plans on track although that came as it suffered second-quarter pre-tax loss of ¥44.6 billion.

Last month, Nomura Real Estate Group merged three investment management companies to form a “one stop shop” single entity responsible for the management of private investment funds, listed REITs, domestic investment firms, overseas fund of funds and a “discretionary investment management business for institutional investors”, according to company literature.

Besides its real estate investment management business, Nomura Real Estate Holdings also includes residential and commercial development businesses, property brokerage and a facility research, planning, architecture and design business.