Big money for Japan property

ONE of Japan’s biggest companies Mitsubishi Corporation and UBS Realty are planning to launch Japan’s the first industrial real estate trust worth $US1.69 billion.

Japan real estate recently experienced its first rise in property prices in some 16 years.

The REIT will focus on distribution facilities around Japan‘s existing ports and airports and is likely to double to around $US3 billion within five years.

In recent times, Japan property has become the flavour of the month with property investors around the globe.

One analyst believes presently there are too many players in the Japan property market causing a sudden over heating of tradition assets such as the office market and residential property.

“Industrial isn’t well understood here as a property asset. It is actually an under developed part of the Japan property market, however, the move by Mitsubishi and UBS will liven up the market,” one Japan based property analyst told Australian Property Journal on the weekend.

According to STB Research, total assets held by real estate trusts in Japan surged 59% in 2006 to 5.4 trillion yen.

The Mitsubishi – UBS team are seeking the higher yields from industrial assets around Japan.

Another player seeking greater investment exposure to the Japan property market is US based property investment giant ProLogis.

Prologis plans to spend some $US3 billion in Japan.

Latest figures out of Japan shows that land prices in Japan jumped significantly last year as local and international investors competed for properties in Tokyo, Osaka and Nagoya.

Average commercial land prices in the Tokyo, Osaka and Nagoya rose 8.9% while residential land prices grew just 2.8%.

Analysts expect prices in every sector of the Japan property market will rise dramatically over the next three years with the flood of overseas funds pushing up prices.

Australian Property Journal