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A unique compilation of news, opinions, and analysis on real estate investment trends in Japan, brought to you daily by an industry insider in Tokyo.
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Hiatus 12 Jan 2006 10:27 PM (19 years ago)

The Japan Real Estate Blog is now on hiatus. We regret any inconvenience, and hope to resume blogging at a later date. Thank you for your understanding.Japan Real Estate BlogTags : japan, real estate, property, investment, 不動産

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Mutual Funds 1 Dec 2005 12:42 AM (19 years ago)

Is investing in a mutual fund or hedge fund similar to gambling?In more ways than one, as Amit Varma discovers (via the PSD Blog).Japan Real Estate BlogTags : japan, real estate, property, investment, 不動産

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Mixed Record for New J-REITs 27 Nov 2005 5:01 PM (19 years ago)

An interesting article in the Nikkei last Friday pointed out a sobering fact: only half of the J-REITs which came to market in fiscal 2005 have opened at above their IPO listing price. REITs listed by much-watched Japanese fund management companies like Creed Corp. , Asset Managers Co. and daVinci Advisors KK, are among the losers.Among the reasons are the lower quality of assets, in age, size,

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State of the Market 24 Nov 2005 10:07 PM (19 years ago)

According to the Nikkei, J-REITs, private domestic funds, and foreign funds each currently have around 3 trillion yen of real estate assets under management. Because of the fierce competition for good buildings, expected yields for prime Tokyo office have declined from 6.3% in 1999 to 4.4% now, and the best assets can command less than 3.5%. At the same time, average leverage has gone up, from

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More Fallout from the Aneha Scandal 24 Nov 2005 7:36 PM (19 years ago)

Thirteen condos are to be demolished, and four hotels have stopped operations following revelations of falsified structural reports (see previous post). Meanwhile, Kimura Construction, the builder of many of the projects in question, has gone into bankruptcy. The Japan Times writes:The builder emphasized lower costs and faster construction to win condo and hotel construction bids in the Tokyo

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Seismic Consequences 19 Nov 2005 11:58 PM (19 years ago)

Last week, it was discovered that an architect had falsified structural analyses for 20 condominiums and a hotel in the Tokyo area – 13 of which have already been completed. At least four of the buildings might collapse in an earthquake with an intensity of upper 5 on the Japanese scale of seven.The architect, Hidetsugu Aneha, admitted to falsifying the reports in order to ‘cut costs’. However,

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Niigata to Pioneer Securitization of Public Assets 18 Nov 2005 6:29 AM (19 years ago)

The government of Niigata is planning one of the first securitizations of local government owned assets. Two Tokyo housing blocks for employees of the prefecture are slated to be the first subject of the program. The buildings are in Kita-ku, Tokyo, and are valued at approx. 330 million yen (full story – Kyodo/Asahi Shimbun, Archive). Niigata Governor Izumida said on Thursday (11/19) that no

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Retail Notes 17 Nov 2005 10:35 PM (19 years ago)

Italy's Institute of Foreign Trade (ICE) puts out an excellent monthly newsletter with the latest trends in Japanese fashion retail. It has unrivalled coverage of new store openings in the sector, especially by international brands. They also have brief but concise introductions to some of the major domestic players such as Aoyama Shoji, Shimamura, Fast Retailing (Uniqlo), and Beams.Here is an

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That'll Teach 'Em Lyin', Cheatin' Real Estate Agents 11 Nov 2005 1:28 AM (19 years ago)

The Fair Trade Commission wagged its finger at real estate firms who give misleading names to their apartment developments. At first I thought there had been complaints from irate buyers who bought a "Mansion" only to find out that it actually an "Apartment", a "Heights", or even a "Co-op" (see below for definitions). It turns out they wanted to crack down on those naughty developers who call

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Another Blow to 'The Family' 10 Nov 2005 8:26 PM (19 years ago)

Seibu Railways today announced its reorganization under a new holding company to be formed in March. Yesterday, it rejected a rival takeover bid launched by two brothers of the disgraced founding-family scion Yoshiaki Tsutsumi. As expected, the current management picked Cerberus and Nikko Principal Investments (see my previous post) to be the biggest shareholders in the new entity, Seibu

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Alex Kerr on Japan's Recovery 8 Nov 2005 1:58 AM (19 years ago)

The Japan Times recently had an absorbing interview (full text here, archived here) with Alex Kerr, author of the insightful and sometimes shocking Dogs and Demons :Things are getting good again economically a little too soon. What that does is lull everyone back into a feeling that everything is going to be OK: "Let's talk about reform, but we don't really have to take the pain of it." Japan

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Got Glut? 3 Nov 2005 5:57 PM (19 years ago)

Anyone in the business can tell you that yields for Japanese real estate has fallen significantly in the past two to three years. You used to be able to buy a prime office building in Tokyo for a 5% cap rate. REITs now purchase at around 4%, and some recent transactions have even gone below 3.5%. As I’ve covered previously in various posts, the big investors are diversifying their strategies -

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Japan Economy Outlook : Recovery to Last Through 2012 31 Oct 2005 5:11 PM (19 years ago)

A few excellent articles on Japan’s recovery :Jesper Koll (Chief economist, Merrill Lynch Japan): Japan has successfully worked off its post-Bubble excess debt, excess capacity, and excess unemployment. Labor costs are falling, and structural inefficiencies have been effectively diminished, allowing for increased productivity. The chances of Japan re-emerging as a high-growth industrial

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Yoyogi Park to be Razed for 2016 Olympics? 30 Oct 2005 6:32 PM (19 years ago)

The Daily Yomiuri reports (archive here) that Yoyogi Park may be paved over to make way for a new stadium and other sports facilities. The development is part of Tokyo’s bid for the 2016 Olympics, which Gov. Ishihara announced last month - see this post.On a personal level I am absolutely shocked and angered by this. Yoyogi is my favorite park in a city with too few. More objectively, Tokyo has

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How Much Is My Blog Worth? 28 Oct 2005 1:34 AM (19 years ago)

My blog is worth $3,387.24.How much is your blog worth?Not a bad figure considering the hours I've put into this thing. Click here to see the latest valuation (From Business Opportunities Blog, via The Big Picture)Japan Real Estate BlogTags : japan, real estate, property, investment, 不動産どうせ 現金化 なんか できない くせに

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Tokyo's Property Firms See End of 15-Year Slump 27 Oct 2005 11:01 PM (19 years ago)

The latest quarterly survey of SMEs in Tokyo found that business confidence for the real estate industry has actually turned positive for the first time since 1990. The diffusion index  went from –0.7% to +0.7% in the July to September quarter. The survey is published by the local Association of Shinkin Banks (see here for a definition).Full Story (Nikkei)Japan Real Estate BlogTags :

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The Fund Crowd Gets Some R&R 27 Oct 2005 1:07 AM (19 years ago)

This from the Nikkei : Real estate funds are finding the competition too hot in Tokyo, and are shifting their focus to hotels, golf courses and other leisure facilities. These companies now estimate returns of at least 8% for some funds investing in leisure facilities, compared with 5-6% for funds targeting office buildings in central Tokyo. It helps that growth in the number of wealthy seniors

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Osaka's First REIT Gains Fans 26 Oct 2005 7:52 PM (19 years ago)

Osaka’s Hankyu REIT (8977) listed on the Tokyo Stock Exchange yesterday at 620,000 yen per share. It put in a respectable performance, compared to recent new issues (see this previous post), and ended at 630,000. At noon today it is at 643,000. Not bad (speculation: Osakans are glad to see a new REIT that focuses on their area).It currently has five assets, mostly retail or mixed-use buildings in

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Japan's Towns Say No to Big Retail 25 Oct 2005 11:47 PM (19 years ago)

Japan’s small towns and regions are leading a backlash against suburban retail development. This month, Fukushima became the first prefecture to impose a permit system for new large stores - defined as over 6,000 sq.m. in store area - on top of the existing environmental and public-comment requirements (see this Asahi report). Other prefectures like Kumamoto, Iwate, Toyama, Shizuoka, and Okinawa

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The End of Omotesando? 21 Oct 2005 2:09 AM (19 years ago)

This, just across from the Esquisse building I talked about in an earlier post:Mark Devlin has a scathing piece (archive) in today’s Metropolis attacking Mori Building and Tadao Ando for ruining his neighborhood. Omotesando Hills, built on the site of the tumbledown, rustic Dojunkai Apartments (1927), is finally taking shape.One would think that on a street that purports to be Tokyo’s Champs

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Goldman's Hotel Binge 21 Oct 2005 12:26 AM (19 years ago)

Goldman Sachs is preparing to list Japan's first hotel REIT, through its subsidiary Japan Hotels and Resorts. The company obtained a REIT licence in July, and the Nikkei reports that the listing is due by the end of 2005. Their portfolio includes the Shin-Urayasu Oriental Hotel (near Tokyo Disneyland in Chiba), The Hotel Nikko Alivila (Okinawa), the Kobe Meriken Park Oriental Hotel, and the Namba

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Next Up on Omotesando 20 Oct 2005 6:36 PM (19 years ago)

Japan Retail Fund (ticker: 8953) announced redevelopment plans for the Esquisse Omotesando building. The 1982 building is to be demolished to make way for a larger edifice with a cutting-edge design (see above), increasing the leaseable space from 3,780 to 5,000 square meters. This is a surprise - although redeveloping properties is fairly common practice for US REITs, this is the first time for

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Tightwads 19 Oct 2005 6:23 PM (19 years ago)

The US Embassy in Tokyo has been refusing to pay rent for its land for seven years, the Sankei Shinbun reports (full story here).The 18,000 sq.m. site is 72% owned by the Japanese government, and the ground lease is a paltry 2.5 million yen ($21,000) per year, an unbelievably low sum for the prime Akasaka location, near the Diet Building and Prime Minister’s residence. For comparison, the British

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Doomsayer 19 Oct 2005 5:10 PM (19 years ago)

Sanyu System Research Institute, a major appraisal firm, has a contrarian opinion on the future of land prices in Japan. In an interview with the Nikkei, Akiyoshi Inoue said thathe expects land prices in Japan to fall by half in five years, citing the risk of oversupply lurking behind the current property bubble in central Tokyo. Excerpt:Q: Despite your prediction, land prices in Tokyo's 23 wards

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Honeymoon's Over for J-REITs 19 Oct 2005 2:15 AM (19 years ago)

I wrote last month that current J-REIT prices are unsustainable, mainly because of falling yields and rising interest rates. Compared to global REIT PERs, those of Japanese REITs’were certainly very high, too. Now, the fast money is beginning to move out.Investors gave two new J-REITs the cold shoulder in as many weeks, pushing their prices well below their IPO levels. First Credit’s FC

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