Japan’s large companies have shown resilience in the difficult period after the Great Tohoku Earthquake shook the country in March this year. Supply-chain disruptions were resolved quickly and economic forecasts for 2011 have been revised upward a couple of times already, although the strong yen and the deepening sovereign crisis in Europe cast a shadow over further recovery.
In Japan’s capital markets, conditions are still favourable for refinancing existing debts. This has limited the number of properties for sale, especially sales of distressed assets. On the other hand, a number of foreign domiciled managers and investors, who had been on the sideline for new investment after the earthquake, were attracted back to the market by Japan’s wide yield spreads. These foreign investors have closed a number of deals in recent months.
Among the property sectors, vacancy rates are improving in the office and industrial sectors while recovery has not yet been seen in rents in these sectors. High street rents picked up in some submarkets in Tokyo and Osaka while residential capital value held strong due to government tax cut initiatives.
Source : RREEF