Tag Archive | "Japan"

Office Rents Expected to Decline in Tokyo

Tokyo’s commercial office real estate market has struggled in the past year, causing rents to drop to record low levels. In the most recent report from the nation’s top real estate analysts, office rents are expected to continue their decline for at least the next six months.

The reason for the anticipated decline is that office supply and vacancy numbers are at their highest level in five years. New and available office space is expected to increase by twelve percent in the next few months, as two new office towers are expected to be completed by the spring of 2012.

The rents have dropped low enough to make various companies consider moving to a more ideal location. With that said, the next six months will definitely be an ideal market for tenants.

The office vacancy rate is up more than six percent from where it was just a few years ago. As such, rents have dropped to historic lows, as landlords struggle to keep their office property space filled to capacity.

Newer properties have performed the best in the last year, as their vacancy rate continues to drop. Companies that previously had their offices in the older buildings are opting to move to the new facilities, particularly since the rents are so cheap at this point in time.

Analysts believe that office rents will recover strongly after the next six-month period is over. They feel that the bottom will be hit in the next six months, and the market will turn around soon after.

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Japanese Bankruptcies Expected to Rise in 2012

Japanese real estate companies are expected to have a very difficult year in 2012. More than five hundred property companies may declare bankruptcy in the near year. If the predictions are accurate, it will be the third straight year during which bankruptcies of property companies have increased.

The rising number of bankruptcies among property companies can be attributed to a number of factors, though the biggest may be the actions taken by Japanese banks to cut back on riskier loans. The cut backs by Japanese banks largely stem from fears that the United States economy and the European debt problems will get worse. As such, many developers are being denied loans that they may have once received in the past.

Because financing is so critical when it comes to real estate companies, small property firms are struggling to stay afloat with the cut backs. The larger property developers and real estate firms, on the other hand, are thriving, and taking control of the market. Seven real estate firms own more than half of the residential rental market. That number is up from just twenty percent three years ago.

There is some concern among real estate analysts that the market will suffer serious consequences, as lending cut backs essentially eliminate healthy competition. There is no clear indication as to what negative effects will be brought on by the lack of competition, though analysts are adamant about their concerns. They believe that additional fees may be added to closing costs, and that some buyers may be turned away without legitimate reason.

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Increased Bond Sales Likely Amidst Record Debt for Japanese REITs

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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A $1.7 Billion Real Estate Bid In Japan

A $1.7 Billion Real Estate Bid In Japan

Global Logistics Properties Ltd. (GLP) is a coallaition of three major companies of the world Mitsubishi Corporation (8058), Kenedix Incoerporation (4321) and Blackstone Group LP (BX). The alliance company is said to submit in bids of real estate in Japan amounting to 140 billion Yen which is approximately $1.7 billion.

The assets are said to be locally owned by LaSalle Investment Management Incorporation and comprises of 24 warehouses located in the twin cities og Tokyo and Osaka. GLP is said to be partially owned by the Government of Singapore Investment Corporation and is a major dealer in warehouses segmenty of the real estate industry that are located near the seaport.

The transaction is said to be the biggest one after the sale of Tokyo’s Famous real estate Toranomom Pastoral Hotel which was acquired by Mori Trust Company at a cost of 231 billion Yen in the year 2007 and the purchase of Pacific Century Place building by Shinsei Bank Ltd in the year 2009 for an amount of $1.6 billion.

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