Writing Japan’s first land trust — and the first on public land (1984)

Not an invention, but half a step

“The business of trust banks is the same everywhere. What we actually do is fundamentally alike” — the remark of managing director Hayasaki Hiroshi in 1981 catches exactly what this mandate was. The mechanism of the land trust itself had been worked out at the Trust Companies Association in 1973, and the bank that carried the flag there was Mitsui Trust. What Sumitomo Trust took was not an invention but a half-step: being the first to raise its hand for a product on which no one had yet been first. It seems that half-step was only within reach because the bank already stood at the top of the industry in real-estate transaction volume.

That half-step, though, brought in more than earnings. Having moved from the side that takes land as collateral to the side that operates it, the trust bank took on work premised on land prices continuing to rise, and after the bubble burst it was left cleaning up after names like Azabu Building and Dai-ichi Corporation. Going first can be entirely rational, and still you do not get to choose what you will be holding when the market you stepped into reverses. The record of having pioneered the land trust contains both sides at once.