Elliott Investment Management, L.P. and Elliott Advisors (UK) Limited (“Elliott”), which advise funds that together have a more than 3% ownership stake in Sumitomo Realty & Development Co., Ltd. (“Sumitomo Realty” or the “Company”), making Elliott one of the Company's largest shareholders, note last week's announcement from the Company.
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We believe the Company's “Policy on Utilizing Fixed Assets and Leveraging Strategic Shareholdings” lacks both ambition and urgency. This policy falls short in achieving capital efficiency, enhancing shareholder returns and reducing cross shareholdings. As a result, the Company's valuation continues to suffer.
The Company's asset sale target of JPY200 billion represents just a small fractionofSumitomo Realty's total leasing portfolioand may not be completed until the 2030s. Similarly, the Company's 10-year timeframe to divest JPY400 billion of its portfolio of strategic shareholdings is far too long. Cross shareholdings remain an immediate concern and, in our view, are a key reason for the Company's low shareholder approval at this year's AGM.
Sumitomo Realty must expand its ambitions and accelerate the implementation of its envisioned policy. This would unlock capital for higher-return growth projects and increased shareholder returns, helping to address the Company's persistent undervaluation.
We will continue to work constructively with Sumitomo Realty's management team and engage with other shareholders to address these issues and raise the Company's corporate value.
About ElliottElliott Investment Management L.P. (together with its affiliates, “Elliott”) manages approximately $72.7 billion in assets as of December 31, 2024. Founded in 1977, it is one of the oldest funds under continuous management. The Elliott funds' investors include pension plans, sovereign wealth funds, endowments, foundations, funds-of-funds, high net worth individuals and families, and employees of the firm. Elliott Advisors (UK) Limited is an affiliate of Elliott Investment Management L.P.
Media Contacts:
LondonAlice BestElliott Advisors (UK) LimitedT: +44 203 009 1715abest@elliottadvisors.co.uk
TokyoBrett WallbuttonAshton ConsultingT: +81 (0) 3 5425-7220b.wallbutton@ashton.jp
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SOURCE Elliott Investment Management L.P.
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