Categorized | Investing

Increased Bond Sales Likely Amidst Record Debt for Japanese REITs

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With a record amount of debt coming due in the next year, financial and real estate experts in Japan are expecting a significant amount of new bond sales by Japanese real estate investment trusts. Japanese real estate investment trusts have already registered to see a record amount of one trillion yen in bonds over the next few years. That number may actually increase with over two billion dollars of debt coming due.

Many Japanese real estate investment trusts are looking to sell bonds so as to facilitate the repayment process of the debts that are coming due. As such, refinancing the debt has become an increasingly attractive option for these trusts.

The overall real estate investment trust index has seen massive declines this year, due in part to both the devastating earthquake that decimated parts of the country, as well as the fact that many trusts are facing record debt. Despite the declines, financial analysts believe that REITs provide for a very opportunistic investment, and may actually provide some excellent returns.

One of the primary reasons as to why real estate investment trusts are considered to attractive to investors is that the real estate market is receiving government support. Currently there exists little risk of defaults within the market, making it a safe and stable option.

Furthermore, prices realized in commercial real estate transactions have soared through the roof, essentially tripling the number from the previous quarter alone. Office vacancy rates are down slightly, and rent prices have fallen as well in the Japanese commercial real estate market.

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About Drew Wilson

Drew focuses on the Commercial and Mortgage/Finance categories.

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