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Japanese companies outside the real estate sector generated more than $77bn in paper profits last year from their non-core property portfolios, increasing pressure on them as investors demand asset sales to unlock value. 

The paper profits were spread across more than 250 companies in industries ranging from food production and glass manufacturing to advertising and financial services — many of them businesses that built property empires in the 1980s and have never needed to sell them.

The calculation of their 2023 gains by analysts at Goldman Sachs has emerged ahead of the June annual meeting season — the 10-day stint at the end of next month during which more than 2,000 listed companies meet shareholders.

Legal and banking advisers said the season would probably generate more friction than previous years, in part because of pressure on companies from the Tokyo Stock Exchange to focus on capital efficiency and valuations.

The glut of unrealised property gains last year follows 10 years in which prices of Japanese commercial property and condominiums have risen, and where, unlike London, New York and Hong Kong, remote working has not taken hold and Tokyo office vacancies remain low post-pandemic.

Actual real estate companies, such as Mitsubishi Estate and Tokyo Tatemono, have performed strongly, with shares for the sector up more than 20 per cent since January.

But Goldman’s Japan equity strategist, Bruce Kirk, said companies were under pressure from shareholders to justify their non-core businesses, and the vast property portfolios looked anomalous. 

Bankers who have advised Japanese companies on dealing with activists said that where investors once saw the property portfolios as a peculiarity, their existence now painted a target on companies and made them vulnerable to shareholder campaigns.

Goldman’s report focused on about 250 companies in the Topix index that were not real estate specialists but had business segments operating their real estate assets. 

Accounting changes made in 2010 obliged companies to disclose the book value of properties held for investment or rental, along with an estimate of market value. The difference between those two figures produces an annual reckoning of unrealised gains or losses on the property, which in many cases is office space.

Between them, those companies declared $77bn of paper gains in 2023 — not far off the $89bn of paper gains declared by the Japanese real estate industry itself.

Recent high-profile activist fund engagements with Japanese companies, including Elliott Management’s tussle with Dai Nippon Printing, have focused on non-core property assets.

“The potential value unlock from undervalued non-core real estate provides investors with yet another pressure point to focus on during their discussions with Japanese corporate management,” said Kirk.

He added there was likely to be some debate around the definition of core versus non-core, and his screening of companies with large non-core real estate portfolios deliberately omitted Japan’s railway companies, which hold significant properties around their stations.

“The corporate governance momentum is definitely on the side of investors at the moment,” said Kirk. “This could encourage a lot more scrutiny of the reasons why non-real estate companies have such extensive portfolios of real estate assets during this year’s AGM season.”

NEW YORK (AP) — A video posted to Donald Trump’s account on his social media network Monday included references to a “unified Reich” among hypothetical news headlines if he wins the election in November.

The headline appears among messages flashing across the screen such as “Trump wins!!” and “Economy booms!” Other headlines appear to be references to World War I.

The word “Reich” is often largely associated with Nazi Germany’s Third Reich, though the references in the video Trump shared appear to be a reference to the formation of the modern pan-German nation, unifying smaller states into a single Reich, or empire, in 1871.

The 30-second video appeared on Trump’s account at a time when the presumptive Republican nominee for president, while seeking to portray President Joe Biden as soft on antisemitism, has himself repeatedly faced criticism for using language and rhetoric associated with Nazi Germany.

It was posted and shared on the former president’s Truth Social account while he was on a lunch break from his Manhattan hush money trial.

“This was not a campaign video, it was created by a random account online and reposted by a staffer who clearly did not see the word, while the President was in court,” Karoline Leavitt, the campaign press secretary, said in a statement.

Earlier this month, Trump said at a fundraiser that Biden is running a “Gestapo administration,” referring to the secret Nazi police force.

Trump previously used rhetoric echoing Adolf Hitler when he said immigrants entering the U.S. illegally are “poisoning the blood of our country,” and called his opponents “vermin.”

The former president has also drawn wide backlash for having dined with a Holocaust-denying white nationalist in 2022 and for downplaying the 2017 rally in Charlottesville, Virginia, where white nationalists chanted “Jews will not replace us!”

At least one of the headlines flashing in the video appears to be text that is copied verbatim from a Wikipedia entry on World War I: “German industrial strength and production had significantly increased after 1871, driven by the creation of a unified Reich.”

In one image, the headlines “Border Is Closed” and “15 Million Illegal Aliens Deported” appear above smaller text with the start and end dates of World War I.

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The stories that matter on money and politics in the race for the White House

A top donor to US President Joe Biden has called on him to halt arms shipments to Israel, warning that the “catastrophe” of the Israel-Hamas war has imperilled his re-election bid.

George Krupp, who expects to raise $2.5mn at a fundraiser he is co-hosting in Boston on Tuesday, urged Biden to take the issue “off the table” by suspending arms shipments to Israel. 

“I think this Israel thing has been a catastrophe for him,” Krupp told the Financial Times. “I absolutely think that Biden needs to suspend arms shipments both for humanitarian and political reasons.”

The president’s stance on the war has divided Democrats across religious and generational lines. He has strongly supported Israel’s right to defend itself in response to the October 7 Hamas attacks.

On Monday he described the International Criminal Court’s application for arrest warrants against Israeli leaders as “outrageous”, adding: “We will always stand with Israel against threats to its security.”

But there has been growing criticism within the party over his failure to rein in the government of Prime Minister Benjamin Netanyahu as the death toll in its war against Hamas has soared to more than 34,000, according to Palestinian officials.

The president this month paused a shipment of bombs to Israel over Netanyahu’s refusal to rule out an invasion of the Gazan city of Rafah, but last week he approved a $1bn package of military aid to the country. In April the US vetoed of a Security Council resolution that would have granted a Palestinian state full membership of the UN.

There are fears that young voters opposed to Israel’s military offensive in Gaza could desert Biden over the issue, while pro-Israeli Democrats could turn to Donald Trump.

More than 100,000 Democrats — or 13 per cent of the total vote — in Michigan, which has a large Arab-American community, voted “uncommitted” in the March 15 Democratic presidential primary over Biden’s stance.

Krupp, who signed a letter in March along with dozens of other donors and activists expressing their concern about “the crisis in Gaza”, told the FT that Biden’s “equivocation” over the war is “hurting” his re-election campaign. He added that the president needs a clear “doctrine” that “gets Israel out of Gaza and lays out a path to a two state solution”.

Krupp’s comments came after Democratic mega donor Haim Saban criticised Biden’s decision to halt the heavy weapons shipment to Israel. 

“Bad, Bad, Bad, decision, on all levels, Pls reconsider,” Saban wrote in an email to White House senior officials last week. “There are more Jewish voters, who care about Israel, than Muslim voters that care about Hamas,” he added in comments that were criticised by the Council on American-Islamic Relations and other civil rights groups. A representative for Saban declined to comment.

Democrats hope the party will unite to prevent a Trump victory. They point out that the former president called for a ban on Muslim immigrants in 2015. Biden has also been far more successful at raising funds, attracting $66mn more than Trump by the end of March.

“Donald Trump’s actions against the Muslim community as president are abhorrent,” New York Governor Kathy Hochul told the FT. “I support the president, how he’s handling this . . . [Israel needs] to eradicate Hamas but we also need to make sure the loss of innocent lives is mitigated.”

Patricia Gordon, a board member of the liberal, pro-Israel group J Street, who has hosted a fundraiser with first lady Jill Biden, said she also supported Biden’s approach to Israel and was confident that he would prevail.

“The president will always defend Israel, but recently took the difficult step to prevent the misuse of American resources in an offensive way,” Gordon said.

But with opinion polls favouring Trump, Krupp and many Democrats fear that the Gaza war could tip the balance against the president.

“I think if the election were held today, I think he’d lose,” said Krupp.

Additional reporting by Jude Webber in Dublin