MUFG acquires $681M Osaka real estate to push tokenization in Japanese markets

MUFG, through its trust banking unit, just dropped over ¥100 billion ($681 million) on a high-rise building in Osaka City.

According to The Nikkei, the group is interested in turning the tower into digital securities and will offer fractional ownership through tokenized real estate, targeting both retail buyers and major institutions.

This isn’t a soft trial. On the institutional side, the property will be converted into a private real estate investment trust (REIT), mainly sold to life insurance firms.

For retail investors, MUFG plans to sell tokenized slices of the asset, giving ordinary buyers access to large commercial real estate without needing millions in capital.

Mitsui splits from MUFG but still tied through Progmat

Now Japan isn’t copying Europe’s playbook. While digital bonds are the focus over there, here it’s all about tokenized property. The market’s still in early stages though. Right now, there are only six listed real estate tokens on the Osaka Digital Exchange’s START market, with a total monthly trade volume of just ¥23 million ($157,000).

Since 2021, Japan has seen 63 digital security issuances, worth a total of ¥194 billion ($1.3 billion). Around 80% of those were real estate deals, with only 20% in bonds. The interest is clearly on turning buildings into tradeable digital assets, even if the market isn’t moving much yet.

One firm has been pushing hard in this space, and that’s Mitsui Digital Asset Management. It has issued 16 tokenized real estate deals, and 14 of those came through its Alterna platform, which sells directly to retail buyers.

For a while, Mitsui relied on MUFG Trust to handle the legal backend of its tokens. But that changed last month. Mitsui ditched MUFG’s trust services and built its own system, the Alterna Trust, so it could speed up token launches. That move made it look like MUFG and Mitsui are now in direct competition.

Still, the companies can’t seem to fully cut ties. Both remain linked through Progmat, MUFG’s security token platform. Even though MUFG spun Progmat off into a separate business, it still holds a 42% stake. Mitsui, despite ending the trust service deal, signed an agreement to keep using Progmat for most of its upcoming tokens.

So while MUFG lost Mitsui as a trust client, it still profits on the backend. That’s how the Japanese firm is playing it. Only time will tell if it’s a smart play.