On April 11, one month after the Tohoku Pacific Earthquake, Tokyo Tower appeared with the message “Ganbaro Nippon” (Let’s Carry on Japan, doing our best).
We will provide our clients, business partners and visitors to this page with market information, analysis and assessments on the impact of the earthquake on the Japanese Real Estate Market available from Japanese and English language media source.
We will summarize articles that have been published by media such as newspapers, magazines, research institutes, on-line news providers and provide our visitors with the source of such news.
We will pool all earthquake related articles under the topic “Ganbaro Nippon”.
Radiation danger at Fukushima lower than originally assumed
The nuclear accident at Fukushima will cause little injury to people in the prefecture – that has been concluded by two studies (United Nations World Health Organization – WHO), UN Committee on the Effects of Atomic Radiation (UNSCEAR).
According to reports, even the workers who fought on the front line against the catastrophe, are not ill.
In two places in the prefecture of Fukushima with the strongest radiation the level of radiation since the accident ranged between 10 and 50 millisievert (mSv) located Millisievert: unit indicating the biological radiation exposure of humans 10 Millisievert roughly equivalent to the radiation exposure of a CT.
WHO Report (World Health Organization) Preliminary dose estimation:
J-REITs actively invest in Tohoku, YTD amount to be over JPY 10 billion
Nikkei newspaper reported that J-REITs have been actively investing in the earthquake- and tsunami-hit Tohoku region. J-REITs’ acquisition amounted to JPY 11.4 billion in the first 7 months of 2012. The amount was the highest in the past 5 years. Residential properties attract J-REITs investment. Corporations are expanding man power due to reconstruction work in the region. Thus, rent demand in the region has been burgeoning.
This year’s YTD acquisition amount was 80% larger compared with that in 2010. The whole year amount may surpass JPY18.9 billion, the 2007 historical high number.
The J-REITs investment was mostly concentrated in Sendai-city, the largest city in the region where many corporations hold regional headquarters, expanding headcount.
Retail sales rose 1.9% in January 2012, much stronger than expected.
Japanese retail sales rose 1.9% year-over-year in January, against a median market forecast of 0.2% decline, according to a report by Ministry of Economy, Trade and Industry (METI) published on February 28. On a seasonally adjusted month-over-month basis, January retail sales were up 4.1% from December 2011. These numbers show consumer spending and consumer confidence recovered strongly from the devastating damage of the earthquake in March last year. Kenzo: On December 1, 2011, we published Japan Market Outlook which forecasted a strong 3% growth in 2012. We believe the above retail sales performance is an early sign of robust economic performance this year, much stronger than expected.
For further statistics, please see METI
World No 2 and 3 Economies agree on a Currency Pact: Japan and China agree on the preference of their own currencies for the internal trade.
According to NHK Japan’s Prime Minister, Mr Noda, and Chinese Prime Minister, Mr Wen, agreed on the use of each others currency for trade between both countries. So far the use of US$ has been by far the dominate why of payment. They further agreed using a fund of the foreign reserve to strengthen the economic cooperation between Japan and China including government bond investments. Japan and China will apply regulations for Japanese companies to buy Chinese bonds next year.
Fukushima Daiichi Nuclear Power Station have achieved a cold shutdown condition.
Announcement by the Government of Japan that the reactors at Fukushima Daiichi Nuclear Power Station have achieved a ‘cold shutdown condition’ and are in a stable state, and that the release of radioactive materials is under control.
The International Atomic Energy Agency (IAEA) Director General Yukiya Amano: “The IAEA welcomes the announcement by the Government of Japan that the reactors at Fukushima Daiichi Nuclear Power Station have achieved a ‘cold shutdown condition’ and are in a stable state, and that the release of radioactive materials is under control.”
Five weeks after the earthquake and tsunami wrecked the Fukushima Daiichi nuclear plant, TEPCO, the energy firm in charge of the facility announced a roadmap for recovery.
The plan envisaged two phases:
Phase 1: “Radiation dose in steady decline”, to be achieved within three months,
Phase 2: “Release of radioactive material under control and radiation dose being significantly held down”, to be achieved within the following six months.
IAEA “Overall TEPCO and the Japanese Government have made significant progress and have completed the second step of the TEPCO’s roadmap by the end of the year as they had planned.”
Japan exports rose second month in row at 2.4 percent in September from a year earlier, beating forecasts despite strong JPY
Japan’s exports rose at a faster pace than expected in the year to September, suggesting that resilience in exports is underpinning the economic recovery despite a global slowdown and the strong yen.
Finance Ministry preliminary data published on Monday show that exports rose 2.4 percent in September from a year earlier, compared with a median forecast for a 1.0 percent increase, and followed a 2.8 percent climb in the year to August.
The trade balance turned to a surplus of 300.4 billion JPY ($3.95 billion) following the previous month’s deficit.
Exports to Asia, which account for more than half of Japan’s total exports (53.7%), edged up 0.2 percent from a year earlier.
Exports battled a strong JPY, the dollar fell to a new low at 75.80 to the JPY on Friday, surpassing the previous low at 75.95 set in August.
Widespread recovery of infrastructure and manufacturing 6 month after the Great East Japan Earthquake
Ministry of Economy, Trade and Industry (METI) reports on the process of recovery and rebuilding in the area effected by the March 11 Great East Japan Earthquake and the impact on the economy. Infrastructure such as roads, railroads, seaports, airports and utilities such as electric power, gas and water have been rapidly and steadily recovering their function. Most of the manufacturing bases that had been afflicted by the earthquake and the tsunami have already recovered their production level. (93% of those directly afflicted; 83% of those indirectly afflicted by the disaster). Industrial production is picking up as the reconstruction of supply chains has progressed. Exports exhibit signs of picking up.
J-REITs continue new PO activity
Japan Retail REIT sponsored by UBS and Mitsubishi Corporation announced the total issuance price of their public offering had been fixed at JPY 20 billion. This issuance is the 4th public offering since the disaster. They will buy 12 retail properties all over Japan amounting to JPY 46 billion by using these proceeds.
B Life REIT to issue new units through public offering
B Life REIT sponsored by Daiwa House announced they decided to issue new units through public offering. They expect to receive JPY 19 billion of proceeds to buy 5 residential properties amounting to JPY 17.
Moody’s cuts Japan’s debt rating but the market’s trust remains firm
NHK reports that US credit agency Moody’s Investors Service has downgraded Japan’s debt by one notch, on concerns over the country’s worsening fiscal situation. Moody’s cut Japan’s government bond rating on Wednesday to “Double A 3” from “Double A 2”. The agency says it made the downgrade because the effects of the March disaster and resulting power shortages are slowing Japan’s economic growth. On the other side the agency notes that Japan has the largest external assets among advanced economies. It says the country will continue to win the trust of the market as long as it manages to improve its fiscal condition. The outlook of Japan’s rating is stable.
On the downgrade, Japan’s Finance Minister Yoshihiko Noda said he will not comment on a private-sector agency’s assessment. He added that going by recent bond auctions, the market’s trust in Japanese government bonds remains firm.
The 10 year Japan government bond traded unchanged at a yield of 1.02%.
J-Reits active buyers in the market after earthquake
According to the statistics as provided by ARES Japan (The Association for Real Estate Securitisation in Japan), J-REITs have maintained as active buyers in the market after the March 11 earthquake, buying property for a total of JPY 130 billion between March 14 and June 30.
Link to J-REIT Purchase of property value JPY 3 billion and more PDF 21,2KB
Link to ARES statistics: http://www.ares.or.jp/en/survey.html#qsurvey
First Stage of Roadmap on a cold shutdown of Fukushima completed
NHK News reports: The government and TEPCO said in a joint assessment that the target of the first stage of the original plan — to steadily reduce the level of radiation being released from the plant — has been met over the past 3 months.
They said the amount of radioactive substances spewing from the No.1 to No.3 reactors has been cut to one 2-millionth of the peak recorded just after the nuclear accident in March.
The effort to stabilize the nuclear facility now shifts to the second stage, when workers will focus on further cutting the release of radioactive substances over the next 6 months. Emphasis will be on reactor cooling systems that recycle contaminated water. The goal is to achieve cold shutdown.
Daiwa Office to acquire E SPACE TOWER in Shibuya, Tokyo for JPY24bn
Daiwa Office Investment Corporation announced that it will acquire E SPACE TOWER (Shibuya-ku, Tokyo) for ¥24.0bn. The seller is a special purpose company affiliated to Daiwa SMBC Principal Investments Co. Ltd. The acquisition will be financed by borrowing a total of ¥26.0bn from seven banks.
The office building is located within about a 7-minute walk to Shibuya Station on the JR Lines and on the Tokyo Metro Lines. It has a total floor area of 18,145 sqm and was completed in 2002. The occupancy rate is 89.3% with seven tenants. The NOI is estimated to amount to ¥1,151m per annum providing a yield of 4.8% based on the purchase price.
Nomura upgrades its growth expectation for Japan starting with a annualised quarterly growth in Q3 of 8%
In the latest Nomura Global Economic Outlook, Nomura Securities expects Japan’s largest earthquake to result in a major economic slowdown in H1 2011, but the economy to return to a strong recovery path in H2. The company revised the growth forecast for 2011 to -0.6% from -0.5% and upgraded its forecast for 2012 to 3.5% from 3.3% to reflect the second preliminary GDP estimates for Jan-Mar 2011.
Real GDP growth fell sharply in Q1 2011, with a 3.5% q-o-q annualized decline, because of the effects of the Great East Japan Earthquake. While negative growth will continue in Q2 2011 the company expects exports and production will recover from mid-2011 as supply constraints disappear, reconstruction demand to materialize causing the Japanese economy to experience a V-shaped recovery. Nomura forecasts a 8.0% and 6.6% annualized growth for Q3 and Q4 2011. It is supported in its view by the fact that Japanese companies have retained workers ahead of an expected output recovery.
Largest Public Offering of an J-Reit since August 2007 only 3 month after the Earthquake
According to announcements by United Urban REIT, they have successfully increased capital of JPY 56.5 billion. This is the largest amount of public offering since August 2007.
METI (Ministry of Economy, Trade and Industry) presents a new update on the recovery of damaged infrastructure and manufacturing facilities in the earthquake hit Tohoku area confirming a speedy progress
The attached METI presentation ‘Economic Impact of the Great East Japan Earthquake and Current Status of Recovery’ in an update on the recovery of damaged public transport infrastructure and manufacturing facilities. According to the presentation power blackouts during the coming summer will be unlikely and growth is expected to return to Japan from Q3 2011.
First J-REIT Public Offering since March 11 earthquake a success
According to an announcement by Orix JREIT the firm has successfully placed JPY 12.5 billion worth of new shares. This was the first public offering of a J-REIT since the March 11 earthquake.
United Urban REIT resumes public offerings
United Urban REIT sponsored mainly by Marubeni Trading Company announced that they would resume the public offerings they cancelled right after March 11 earthquake at the beginning of next month. The company hopes to raise JPY 60 billion.
METI (Ministry of Economy, Trade and Industry) confirms speedy recovery of damaged infrastructure and manufacturing facilities in the earthquake hit Tohoku area
The attached METI presentation ‘Economic Impact of the Great East Japan Earthquake and Current Status of Recovery’ confirms a speedy recovery of damaged public transport infrastructure and manufacturing facilities. It further shows the impact of the damage in relation to the national economy as a whole and demonstrates present shortfalls in some industrial areas and their impact on the nationwide industry specific output.
AXA entering the real estate debt market
AXA Real Estate announced that they launched Japanese commercial real estate debt investment vehicle, raising JPY 15 billion at the first close. They commented, “Despite the recent tragic events, AXA Real Estate remains a long term believer in the Japanese economy and the underlying fundamentals of its real estate market.”
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