The success of DiverCity has given investors confidence that Japan?s sluggish property market is improving. DiverCity Tokyo Plaza, a 2.2 million square-foot complex developed by Mitsui Fudosan, has attracted more than 4 million people in its first two months. The company is expecting 25 million visitors a year.
According to Mitsui Fudosan President, Masanobu Komoda, the success of DiverCity has made the recovery trend in land prices clearer, pulling investors back in the market. DiverCity has also lifted Mitsui Fudosan?s stock price to 53% this year. The company?s residential business was strong as well, earning 6.8 billion yen compared to the 790 million yen loss in the same period a year earlier.
All in all, profits of Mitsui Fudosan rose 62% in the first half of the fiscal year and real estate stocks are up 46% this year.
Other companies like Sumitomo Realty & Development and Tokyo Land, are also performing well on the Nikkei this year. Meanwhile, Mitsubishi Estate, reported triple earnings in the first half of the fiscal year with strong apartment sales and increasing office rents.
Bank of America Merrill Lynch analyst, Toshiyuki Anegawa says the average monthly rents in Tokyo?s central business district which were 22,900 yen per tsubo in 2008 are now 16,600 yen and won?t fall further in the coming years.
Other companies are taking advantage of lower rents to get more space in better neighborhoods like Morgan Stanley, a major tenant in a new Mitsubishi Estate building at Tokyo?s center, according to Keisuke Yanagimachi, head of Japan research in Toyko with Cushman & Wakefield.
Meanwhile, Bank of Japan plans to spend 30 billion yen in 2013 to boost its holdings in real estate investment trusts. This has helped Mori Building, Daiwa House and other developers with REITs refinance debt at record-low yields. Analysts also say that the December 16 election might give the property market a little push especially with the Liberal Democratic Party favored by the majority because of their strong urge to tackle deflation.
Photo Credits: wallyg via Flickr Creative CommonsTokyo Apartments For Sale | Tokyo Apartments For Rent | Real Estate Japan
Source: http://www.realestate.co.jp/2012/12/04/japans-property-market-makes-a-comeback/
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