AIG, the US insurance group, has cancelled the IPO of its Japanese real estate investment trust, highlighting the weakness of Japan’s Reit market after the US subprime mortgage turmoil. AIG said Monday it had decided not to list its J-Reit, which has underlying assets of Y100bn ($906bn), due to poor market conditions. The AIG J-Reit was scheduled to go public in two weeks’ time. Last month Tokyo-based APL Japan Trust postponed a $358m listing on the Singapore Stock Exchange. APL’s decision followed the poor initial performance of another J-Reit, Saizen, which fell 14% on its Singapore debut. The J-Reit market has suffered bouts of nervous selling, particularly by Japanese regional banks and global hedge funds covering their losses in derivative markets, analysts said.
