(Bloomberg) -- Japanese real estate giant Mitsui Fudosan Co. surged, leading its peers higher after announcing business plans that included a buyback, a return-on-equity target and payout ratio.  

Shares jumped as much as 8.6% in Tokyo after the company set an ROE target of at least 10% for around 2030 and aimed for annual earnings-per-share growth of at least 8%. The company will also target a total payout ratio of 50% or more, and look to accelerate efforts to cut strategic holdings and reduce them by about half. It plans to buy back up to 1.43% of shares.

The move comes as a growing number of companies in Japan, under pressure from activists and the stock exchange, announce plans to enhance shareholder value. Activist investor Elliott Management Corp., which said it welcomes the plan, had been calling on the Tokyo-based company to buy back shares and sell down its stake in Tokyo Disneyland operator Oriental Land Co. Citigroup Inc. said the ROE and earnings targets were higher than its expectations. 

“The market got a good impression,” said Mitsuhiro Shibata, senior strategist at Daiwa Securities Co. “Given how companies in the sector generally don’t want to be left behind, it’s not unreasonable to think others will follow suit.”

Real estate companies accounted for half of the top 10 gains on the Nikkei 225 Stock Average Friday. Sumitomo Realty & Development Co. jumped as much as 8.1%, while Mitsubishi Estate Co. increased 7.8%. This also came after Mizuho Securities raised ratings for the two developers to buy. A measure of Topix’s real estate companies gained as much as 5.9%, the biggest intraday rise since November 2020.

Mitsui Fudosan’s long-term management plan fully reflected the market’s expectations on shareholder returns, investment in growth and reduction and cross shareholdings, said Rina Oshimo, a senior strategist at Okasan Securities Co. “There are high expectations that this trend will spread to other real estate companies as well.”

--With assistance from Winnie Hsu.

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