The last year has seen a severe regulatory cut to the money supply specifically to real estate in Japan and this is the major cause of the current liquidity downturn in addition to J-REIT troubles with some effect from sub-prime outflows from foreign investors, not any problems with fundamentals.
The sudden inability for funds, institutions, and J-REITs to finance acquisitions is starting to spur refinancing defaults and illiquidity of newly completed buildings, in turn causing the bankruptcy of several real estate developers including Urban Corp last week, Zephyr, etc. and more is expected to come over the next year.
For property investors the expected yields are moving to levels we have not seen for 5 years and this means a yield spread over the risk-free rate that is the highest in the developed world and increasing. An unprecedented buying opportunity, but the exact timing of an oncoming acquisition rush is difficult to see.
We have access to off-market opportunities in all commercial sectors, with special strength in Tokyo and residential and hospitality assets including hotel, ryokan and resort. For retail buyers, we can offer smaller Tokyo properties and exclusive resort properties. Please contact us if you are interested in accessing the market at this juncture. Tokyo Office: +81 3 3584 5067 from outside Japan or 03 3584 5067 within Japan.