Japan firms push for individual investment options for aircraft, cars
TOKYO (Kyodo) -- Some Japanese firms are looking to provide individuals with opportunities to invest in commercial vehicles such as aircraft and rental cars for island tourism, hoping such products will help investors to broaden their portfolios beyond traditional stockholdings.
In what it calls Japan's first publicly offered aircraft investment product tailored for individual investors, FPG Securities Co. will start soliciting funds for an Airbus A320-200 from late June, with the minimum investment amount set at 1 million yen ($7,000) per unit.
The small-lot product will make it accessible for individuals to "own" aircraft, which can cost more than 10 billion yen when brand new and are usually targets for investment by major trading houses and institutional investors.
As the Airbus aircraft will be leased to Spain's flagship airline Iberia, investors will be paid annual dividends from the leasing revenues and may also earn returns from the capital gain on its eventual sale.
With the investment term set for two years and 10 months, the company is projecting a first-year return rate of around 6 percent. The product carries the risk of falling below its initial value at redemption, such as in the case of a decline in air travel demand due to conflicts and pandemics.
Mitsubishi UFJ Trust and Banking Corp., meanwhile, is preparing to launch an investment product for retail investors in collaboration with a rental car business affiliated with Idom Inc., operator of used-car chain Gulliver.
A total of 200 cars purchased by the financial institution in the southern island prefecture of Okinawa in March are to be packaged as a small-lot investment product within the next few years.
While investors can gain from returns from the rental company's profits, the rental firm will not have to borrow funds from banks.
"We hope investors will see this as a way to secure means of transportation at a tourist site and help address challenges such as overtourism," a Mitsubishi UFJ Trust and Banking official said.
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