ULI Japan's Young Leaders Event in Roppongi on Thursday, July 22, 2010 - (27/06/2010)
Amid the stabilizing financial market and growing
confidence for economic recuperation, the ULI Japan Young Leaders Group would like to invite you to a
speaker event featuring Andy Hurfurt,
Executive Director – CBRE Consulting, who will share his views on the latest
real estate market conditions.
Date: Thursday, July 22,
Place: Roti Roppongi –
American Wine Bar and Brasserie
(Piramide Building 1F, 6-6-9 Roppongi,
Minato-ku – 03-5785-3671)
19:30-20:15 Course dinner with 2.5 hours “nomihodai”
20:30-21:15 Market Presentation
21:15-21:30 Q & A Session
ULI Japan Website http://japan.uli.org
+ Japanese Logistics Market by the end of Q1 2010 - (21/06/2010)
economies in the Asia Pacific region continued their growth trends over the
second half of 2009, with some nations seeing acceleration in economic
expansion. Only Japan’s
outlook remains relatively fragile compared with the rest of the region. While
the Japanese economy had experienced three consecutive quarters of GDP growth
by the end of 2009, this comes after some major declines in late 2008 and
beginning of 2009.
exports increased by 5.0% from Q3 2009, and the unemployment rate dropped to
4.9% by the end of the year. In February 2010, exports grew at the fastest pace
in about three decades and have improved noticeably in comparison to a year
ago. However, they are still some 25% lower than their 2008 level. Growing
demand in China and
elsewhere in Asia is helping Japanese
companies, and this might minimize an economic slowdown in the coming months as
government stimulus measures fade.
generally expect that the Japanese economy will continue on its gradual
upswing, despite a moderate dip forecast for Q1 2010. With rising exports to China
continuing to drive growth in Japanese industrial production, the Government
has lifted its view on the nation’s economy.
Source: Ministry of Economy, Trade and Industry
strengthening of the yen has fuelled concerns for the export reliant Japanese
economy. However, with Beijing expected to let its currency appreciate, this
could benefit the Japanese economy going forward as a stronger Yuan will make
foreign goods more affordable in China. Japan
is China’s top source of
imports, with China
importing some US$131 billion worth of Japanese goods in 2009.
Japanese real estate market
growing signs that the real estate market of the Asia Pacific have bottomed. Japan remains
the region’s largest investment market, accounting for almost 40% of total
investment volumes in 2009. From Q4 2009 sentiment began to improve noticeably
in the Japanese real estate investment market. This increased into 2010 amid a
brisk flow of small and medium sized transactions. However, investor attention
is focused primarily on prime office and retail assets.
struggling since early 2008, the J-REIT market started to show signs of
recovery in the second half of 2009. This was due mainly to support from the
Kanmin fund, a Public-Private Real Estate Market Stabilization Fund with total
capital expected to reach JPY 450-500 billion. The Fund has been welcomed by
the market as it has alleviated refinancing concerns for some J-REITs.
Continued government support, mergers and new sponsors are all expected to help
prevent a J-REIT sell-off and further deteriorations in asset values.
Logistics real estate sector
high quality, large scale logistics facilities remains strong in Tokyo. According to CB
Richard Ellis the average vacancy rate for large scale multi-tenant logistics
facilities declined to 14.2% at the end of 2009. Likewise, vacancy rates for
facilities one year and older decreased to 6.8%, which marked the second
consecutive quarterly decline in Tokyo.
This suggests that demand for high quality logistics space is starting to
increase in the nation’s capital, driven mainly by virtually no new supply of
modern warehouse space since the GFC.
Source: CB Richard Ellis
vacancy rates are unlikely to increase further in the short-term with no
significant new supply planned in the near future. Average asking rents in the
Greater Tokyo area have not shown any sign of recovery since declining in
mid-2008. Nevertheless, demand still exists for large scale facilities from
companies planning to consolidate and even to relocate to nearby higher quality
following logistics real estate transactions have taken place since the start
of the year:
On 4 February 2010, the Japan
Logistics Fund J-REIT acquired a 90% interest in a prime logistics property in
Narashino, Chiba Prefecture, from ProLogis. This was the
first transaction between the two parties since the announcement of their
pipeline support plan on 31 August 2009, and marked the first J-REIT
transaction of a logistics asset in a year. The reported NOI cap rate of 5.9%
translates to about 5.2% at current market rents, based on brokerage opinions.
On 19 March 2010, the Industrial
& Infrastructure Fund J-REIT sold its interest in the IIF
Center in Funabashi,
Chiba Prefecture, to Dream Logistics Fund for
a price consideration of JPY 9.02 billion from a related party. The NOI cap
rate is estimated to be about 6.3%.
On 30 March 2010, Orix J-REIT
acquired the Sakai Logistics Center
in Sakai City,
Osaka Prefecture, for a price consideration of
JPY 10.2 billion from a related party. The reported NOI cap rate was 6.1%.
CB Richard Ellis, “prime” Tokyo
logistics cap rates currently stand at 5.5% NOI with some compression expected
from the end of 2010.
In a sign of
increasing investor interest in the Japanese logistics real estate sector, a
wholly owned unit of Mitsubishi Corporation has created an unlisted real estate
fund specializing in logistics facilities. The assets are worth about JPY 23.4
billion, and the fund is to be operated for five years.
weathered the global credit crunch and the ensuing economic downturn, economies
in the Asia region have emerged in good shape
relative to the rest of the world. This has been mainly due to Chinese economic
growth. However, the Japanese economy has not been as quick to respond as the
rest of the Asia Pacific region.
few months if 2010 have seen further tangible improvements in sentiment in the
local real estate investment market, with more capital coming back to Japan in search
of quality assets.
economy still remains fragile and highly dependent on export growth to the rest
of the region. Greece’s
sovereign debt woes and its potential effects on sovereign debt markets around
the world, especially in Europe, have added to
concerns about a sustainable global economic recovery for the world’s second
Pelham Higgins, SCA Japan
+ Parkway Life REIT Acquires six new nursing properties in Japan - (16/06/2010)
Parkway has acquired six Japanese properties located in Kyushu for
a purchase price of approximately JPY3.9 billion.
The acquisition of the nursing properties is expected to be completed by
24 June 2010.
The Properties have an expected net property yield of 8.08% and have
new 20-year operating lease agreements, back-up operators and
rental income guarantees. The property purchase was funded by 5-year
unsecured Japanese yen facility at an attractive rate of 2.0
+ New Europe Industrial Real Estate Fund Formed - (15/06/2010)
The Australian Industrial Property developer GOODMAN
Group has further expanded its footprint into Europe
via a $1.3 billion joint venture with CB Richard Ellis Realty Trust.
There will be two new structures, one in Britain and the other in continental Europe. The two funds will focus on buying and investing
in industrial real estate - warehouses and distribution hubs.
The fund will invest only in
sites where there is a pre-committed tenant.
Under the scheme Goodman would contribute 20 per cent
with CBRE Realty Trust putting in the remaining 80 per cent on a passive
+ Japan Industrial Property Transactions - (15/06/2010)
Bear Logi reports the following industrial property transactions that have occurred in the first quarter of 2010 in Japan.
Transaction Example 1
February 2010/2 March 2010
· Property name: Narashino Logistics
· Buyer/Seller: Japan Logistics
Fund (J-REIT) / ProLogis (Narashino III SPC)
· Interest acquired: 90% of Trust Beneficiary
· Price: JPY 7.875 billion (90%
· Reported NOI: JPY 517 million (100% of
· Reported NOI cap rate: 5.9% (based on 90% of
· Key point: first J-REIT transaction
for almost a year
· Key point: first J-REIT transaction
of a high-specification multi-tenant logistics facility
· Key point: first transaction since
announcement of their pipeline support plan on 31 August 2009
· Key point: quality of the subject
property is superior to the average quality of the JLF portfolio
20 January 2008 (2
100% (3 tenants)
Photograph of the Subject Property
Transaction Example 2
· Contract/transfer date: 9/19 March 2010
· Property name: Funabashi Logistics Centre
· Buyer/Seller: Dream Logistics Fund
(SPC) / IIF (J-REIT)
· Interest acquired: Trust Beneficiary
· Price: JPY 9.02 billion
· Book value: JPY 8.50 billion (as at
19 March 2010)
· NOI: JPY 566 million
· NOI cap rate: 6.3%
· Key point: related party deal due
to Mitsubishi Corporation relationship to both buyer and seller
19 July 2007 (4 years
100% (2 tenants)
Photograph of the Subject Property
Source: Pelham Higgins, SCA Japan Representative
+ Japanese machinery orders climbed 4% from March to April - (10/06/2010)
Japan - Japanese machinery orders climbed 4% from
March to April, a sign that companies are ready to start spending again as the
Higher spend by
companies and consumers would help bolster a recovery that is driven by exports
and hindered by deflation, reported Bloomberg.
Hitachi Ltd. and Tokyo
Electron Ltd. are some businesses benefiting from a recovering global demand,
leading them to forecast better earnings and invest in plant and equipment.
"Capital spend is
moving out of the trough as a result of improving corporate profits," said
Chiwoong Lee, senior economist at Goldman Sachs Group Inc. in Tokyo. "We see continuing improvement
centred on manufacturing."
The Cabinet Office is noticing
a pick-up in machine orders, after orders stopped falling last month. Compared
to a year earlier, they have risen 9.4%.
+ Toll acquires Asian cargo unit from QANTAS - (09/06/2010)
to have abandoned plans to become a significant player in the Asia-Pacific air
freight market after offloading a business it once dubbed a ''great building
block for expansion''.
The sale of
DPEX Worldwide to Toll Holdings has also raised expectations Qantas could sell
its stakes in two poorly performing freight enterprises to Australia Post.
to reveal what it sold DPEX for, other than to say it made a ''small profit''
on the sale. When the airline bought the business for $S40 million in May 2007,
it trumpeted plans to accelerate the expansion of its freight operations.
+ Japan’s economy may have bottomed - (09/06/2010)
Japan's economy hit bottom in March 2009
after a 17-month downturn that began in October 2007, according to the Japanese
The office set the recent business cycle's
lowest point provisionally at March 2009 based on the views of the Working
Group of Indexes of Business Conditions, an expert panel.
The nation's economy, which began to sag in
October 2007, turned sharply down in fall 2008 following the collapse of Lehman
Brothers, the panel said.
The speed and steepness of the downturn
were at an unprecedented level, the panel said.
The rate of the decline, which shows the
gap between the peak and trough of the coincident index, was the second-largest
since the 1980s, when comparable figures were available.
The worst figure was marked during the
post-bubble downturn in the early 1990s.
A majority of 11 economic indicators began
to pick up in April 2009, and the real gross domestic product has kept rising
from the April-June 2009 quarter.
+ Hong Kong Air Cargo up 47%! - (08/06/2010)
volume in Hong Kong is surging towards record
highs for the trade hub, up 47% year over year, and at the highest level in two
and a half years.
handled 354,000 metric tons of freight in April, the strongest volume since
November 2007, and 38 percent better than the airport reported the same month a
year ago amid the steep downturn in global trade.
230,000 metric tons of exports, outbound volume also was the strongest since
The latest data
was also 4.5% higher than the previous month, March. Moreover, Cathay Pacific
(293 HK) recently reported data to confirm the above, highlighting a
substantial tightening of capacity utilization year over year:
airlines [Cathay & Dragon Air] carried a total of 152,808 tonnes of cargo
and mail last month, up 24.1% on April last year. The cargo and mail load
factor was 79.3%, a rise of 13.6 percentage points, while capacity, measured in
available cargo/mail tonne kilometres, was up by 6.4%. For the year to date,
tonnage has risen by 24.1% compared to a capacity increase of 1.1%.
+ Property prices in Japan may be near the bottom - (08/06/2010)
prices in Japan
may be near the bottom because transactions are picking up as loan default
rates begin to decline, said Yuji Hashimoto, a director at Standard &
started to see some property transactions taking place at about 20 to 40
percent discount,” said Hashimoto, director of the structured finance ratings
division at S&P in an interview in Tokyo.
“This tells us that the impact of loan default for the property prices is
likely to be limited going forward and property prices may have bottomed.”
percentage of default in loans backing commercial mortgage backed securities
rated by the U.S.
rating company narrowed to 19 percent in the first quarter, a second straight
decline, a report by S&P dated May 7 showed. The default rate shrank from a
peak of 63 percent in the third quarter last year.
including Chuo Mitsui Trust & Banking Co. and CLSA Capital Partners have
said they will invest in real estate in Japan this year after the nation’s
commercial land prices fell to the lowest in at least 36 years. At least 115
billion yen ($1.25 billion) of properties backing CMBS have been sold by
special servicers as collateral since the second quarter of 2009, according to
best time to invest is before things hit bottom, because if everyone were to
agree we are right at bottom, they would all come rushing back in,” said Buddy
Ferrie, a general manager of the investment division at property consulting
firm Colliers Halifax in a phone interview in Tokyo. “If you have a longer term
outlook, now is a very interesting time to be looking.”
commercial land prices declined 6.1 percent in 2009 from a drop of 4.7 percent
a year earlier, the Ministry of Land, Infrastructure, Transport and Tourism
said in a report in March. Values are at their lowest since the ministry began
collecting comparable data in 1974.
with decline in property prices, building owners are injecting capital to
refinance loans or returning properties to lenders as collateral when loans are
coming due or being reviewed by banks.
Bank Ltd. sold Pacific Century Place, an office building adjacent to the Tokyo station, after K.K.
DaVinci Holdings, the owner of the building, failed to repay loans. Secured
Capital Japan Co., an investment management company, bought the building for
140 billion yen, 30 percent less than what DaVinci had paid three years
loans are more likely to be rescued or receive extension of repayment because
many people believe that it is not wise to sell large properties in the current
market conditions,” said S&P’s Hashimoto. “As a result, they are less
likely to default.”
+ JVC sells their office and factory for Y6.3bn - (07/06/2010)
AV equipment manufacturer Victor Company of
Japan (JVC) will sell its main office
and factory in Moriyacho, Kanagawa-ku,
Yokohama City for 6.33 billion yen [$68
million]. The buyer is real estate
company SG Realty, an affiliate of logistics
company Sagawa Express. JVC will
vacate the main office and factory and relocate
by December, but the company’s
new location has not been decided.
+ Sanritsu rent new 1.6491 square meter warehouse at Hachiouji - (04/06/2010)
Sanritsu corporation anounced that it will have a lease contract for fixed assets.
Facility of New Hachiouji warehouse (2969-2 Ishikawa-cho, Hachioji, Tokyo) which has 8265.01㎡ area of land, and 16491.15㎡ architectural area. Total of lease fee is 3,548billion yen(tax excluded).
The lessee is Hachioji facility development Special Purpose Company which is 100% Daiwa house industry's affiliate company
With the warehouse to be newly built in Hachioji as a inland main hub, Sanritsu is going to target consolidating offices' function around Hachioji and expansion of operations by new business acquisition. Making use of the lease, it will promote effective of funds. Leasing will start on April 1, 2011.
+ Investment interest trend continues to recover - (03/06/2010)
The results of the 22nd edition of the Japanese Real Estate Investor Survey were released by
the Japan Real Estate Institute (JREI), a major appraisal firm. The number of investors
who answered that they would "proactively make new investments" in the coming year
has increased significantly, which made it very clear that investment interest is recovering.
+ Mitsubishi Estate has started leasing of JP Tower - (03/06/2010)
Mitsubishi Estate announced that it has
started leasing of the tentatively named
JP Tower. The tower is currently under
construction on the former site of the Tokyo
Central Post Office in front of JR
The company was selected as a contractor offering support in
property management, as well for the leasing management of the
through a bid held by Japan Post Network of Japan Post Group.
+ Japan Housing starts increased 0.6% in April - (01/06/2010)
Tuesday afternoon MLIT announced
new housing starts increased 0.6% to 66, 568 units in April, compared with last
year and is the first increase in 17 months. MLIT stated “According to seasonally
adjusted annual rate, we can see recovery on the whole, with August, 2009 being
the worst point of the market.” However, MLIT sees the market in a state
continuing to move back and forth.
Condominium units sales turnover was up 35.8% to 9,668
new condominium units. This reflected the
construction of large apartment complexes in Tokyo after another, for the first time in 16
+ Kenedix to set up $110 mln Japan property fund - (01/06/2010)
Japanese real estate
asset manager Kenedix Inc (4321.T) said on Tuesday that it plans to launch a 10
billion yen ($110.8 million) private fund to invest in Japanese office and
commercial buildings, in the latest sign that the country's property market is
Kenedix said the new fund, with a five-year
management period, would use capital acquired from Korean pension funds seeking
stable long-term returns.
The Japanese property sector was it by a
price slump in the wake of the global financial crisis, but some market
participants say that it has bottomed out and is gradually starting to improve.
Prior to the announcement, Kenedix's shares dropped
2.4 percent to a 12-month closing low of 20,000 yen. (Reporting by Mariko
+ GIC may list Japanese Real Estate Assets - (01/06/2010)
SINGAPORE—Government of Singapore Investment
Corp.'s giant real-estate arm GIC Real Estate is considering an initial public
offering in Singapore
of its overseas assets, a person familiar with the situation said Wednesday.
decision may be taken next month," the person said.
He said the
sovereign wealth fund's real-estate arm is looking to list its Japanese assets,
which includes ProLogis Holdings.
deal happens it would be huge, multibillion dollars," the person said,
adding that GIC Real Estate is talking to bankers about the IPO.
still watching the market and the exact timing is yet to be decided given the
recent volatility in the equities market," he said.
GIC Real Estate
invests globally in real estate and real-estate-related assets outside Singapore. It
manages a multibillion-dollar portfolio of direct and indirect property
investments with close to 300 investments in more than 30 countries.
GIC, manages Singapore's
foreign-exchange reserves. It is the world's fourth-largest sovereign fund in
terms of money managed, according to a recent report by Deutsche Bank. Its
portfolio stands at more than 250 billion Singapore dollars (US$177 billion).
In 2008, GIC
Real Estate spent $1.3 billion to buy the China
operations of ProLogis as well as the 20% stake in the company's Japanese
property that it didn't already own, with an aim to consolidate its existing
portfolio in Japan and get a
platform to expand its logistics property business in China.
Estate sees more advantages coming in through the IPO rather than having it
unlisted," the person said.
Source: Wall Street Journal