(Bloomberg) -- An annual report to shareholders from Tokyo Gas Co., expected this week, could be the first opportunity for Japan’s largest gas company to signal its plans for a sprawling, multi-billion dollar property portfolio that activist Elliott Investment Management estimates could be worth as much as 1.5 trillion yen ($9.7 billion).

Tokyo Gas is not unusual among Japanese utilities, which all own significant urban real estate because of infrastructure they once had to own close to consumers. Peers like Osaka Gas Co. and Kansai Electric Power Co. have similarly sprawling portfolios.

But it is the giant in the sector, and holds properties in and around prime Tokyo areas, making it a top target in any effort to improve capital efficiency. It once had a plant in Toyosu, for example, now home to Tokyo’s main fish market and an area that is now being developed into a zero-carbon town. It also owns headline-grabbing properties like Shinjuku Park Tower, which houses the Park Hyatt Tokyo hotel, featured in the 2003 film ‘Lost in Translation’ — and built on a former gas storage facility.

Should it decide to respond to Elliott’s demands with action, Tokyo Gas could cut cross holdings and real estate held for investment purposes, before returning those proceeds to shareholders, said Travis Lundy, a Japan markets expert and special situations analyst who publishes on the SmartKarma platform.

“Tokyo Gas is effectively running a long/short fund — short its own stock to finance long positions in real estate, securities holdings — worth 600 billion yen to one trillion yen,” Lundy said. “It is an inefficient use of capital.”

Elliott, which reported a 5% stake in Tokyo Gas last week, wants the company to sell down its multi-billion dollar portfolio that has little apparent overlap with its core energy business. The fund has focused on the gap between the book value of properties and their potential price tag if sold on the open market.

A Goldman Sachs note published in September estimated that Tokyo Gas had unrealized real estate gains of 447 billion yen — the highest among its peer group, and equivalent just over a quarter of its current market capitalization.

The group’s shares surged in the aftermath of Elliott’s disclosure and have held most of those gains, closing on Tuesday at 4,389 yen — indicating investors expect to see at least some change filter through. While the company’s valuation multiples are broadly in line with the sector, its return on equity, a measure of how efficiently a company is turning a profit, is currently just shy of 4% on an adjusted, quarterly basis — below peers including Osaka Gas, at above 7%.