Gains in Japanese Property
30 May, 2012 -
Land prices in sections of Tokyo and other major Japanese cities continued to rise in the first three months of the year as large commercial developments supported the market, a trend that has drawn fresh interest in the country’s property market from global investors.
Rising prices were seen in bellwether parts of central Tokyo, such as the upmarket Ginza shopping district and the Toyosu waterfront residential area, as well parts of Nagoya and Osaka, a government survey showed Wednesday. But other areas remain caught in the long-term decline dating back to the early 1990s collapse of [...]
(Source – “The Wall Street Journal”)
Goldman Sachs, TPG Launch Japan REITs
24 May, 2012 -
Goldman Sachs Group Inc. plans to launch a private real-estate investment trust in Japan this summer, amid signs of an improvement in the Tokyo property market, a person familiar with the matter [reported to the Wall Street Journal - 24th May, 2012]. Goldman Sachs Asset Management Co. aims to launch the fund in July or August with an initial size of around ¥30 billion-¥50 billion ($376 million to $627 million). It will aim to increase the size of the private REIT to around ¥100 billion in two to three years, the person said. The fund will invest mainly in office buildings in Tokyo, although future investments may include residential and retail properties, as well as targets in second-tier Japanese cities, the person added. The fund would target investors such as domestic financial institutions and pension funds, aiming to provide stable, long-term returns to investors.
This would be the first time the U.S. financial giant has invested in Tokyo properties through its asset-management arm. Over the past few years, Goldman Sachs—like its rival Morgan StanleyMS—actively invested in Japanese properties, seeking more opportunistic investments for high returns. But after the financial crisis in 2008, real estate activity has been in the doldrums with new deals being put on hold and property values dropping. Despite the sluggishness in the Tokyo real-estate market, the city has seen an office building construction boom with a number of new prime-grade buildings in a financial district being completed earlier this year. The boom is expected to continue over the next few years. Some market observers say, regardless of the current oversupply, demand for earthquake-proof prime-grade offices is still strong, while some older office buildings face high vacancy levels.
TPG may [also] invest 50b yen over two to three years, the Nikkei newspaper reported, without attribution.
(Source – “The Wall Street Journal”, “Bloomberg”)
IPC Launches 6th Japan Condo Dev
18 May, 2012 -
IPC Corporation (Singapore developer since 1985, public since 1993) is looking to develop its sixth condominium project in Japan, with the acquisition of a land parcel in Oiso, Kanagawa prefecture. According to a media report, the Oiso project will comprise of 75 units housed in a three-storey tower. It is located approximately 60km south-west of Tokyo. With a total cost of around 2.48 billion yen ($30.41 million), which will be funded through internal resources, the development is expected to be completed by the third quarter of next year. The report noted that the project was pre-sold to a Japanese property firm, with full payment to be made upon the completion of the project and the delivery of units.
Excluding the Oiso development, IPC has completed a total of four condo projects in Japan since mid-2009. The fifth development, an 85-unit project, is located in Oppama, also in Kanagawa prefecture. It is currently under construction and slated for completion by the end of Q1 2013. “The company is continuously evaluating property projects in Japan to purchase, develop, and re-sell, as well as for income producing purposes, in particular business hotels,” said IPC.
(Source – “Property Guru, Singapore“)