Ganbaro Nippon

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”.

  1. 2012.09.14

    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:

  2. 2012.08.15

    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.

  3. 2012.02.29

    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

  4. 2011.12.27

    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.

  5. 2011.12.16

    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.”

  6. 2011.10.24

    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.

    Link: Trade Statistiks of Japan, Ministry of Finance

  7. 2011.10.12

    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.


  8. 2011.09.12

    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.

    Japan Retail:

  9. 2011.09.12

    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.

  10. 2011.08.24

    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%.

  11. 2011.07.26

    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:

  12. 2011.07.19

    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.

    Tepco Status Report (PDF, 246KB)

    Tepco Roadmap (PDF, 0.97MB)

  13. 2011.07.08

    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.

  14. 2011.06.17

    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.

  15. 2011.06.09

    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.

  16. 2011.05.30

    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.

    20110530_Economic_Impact (PDF, 1,03MB)

  17. 2011.05.25

    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.

  18. 2011.05.23

    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.

  19. 2011.05.18

    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.

    METI on Tohoku Impact (PDF 1.5MB)

  20. 2011.05.16

    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.”

    Press Release (PDF 82.9KB)

  21. 2011.05.16

    Foreign Investors shy while domestic investors close significant transactions

    According to CB Richard Ellis Investment View April Edition, most domestic investors have shown a desire to return to business as normal and have continued to pursue deals in the weeks following the disaster with some significant transactions closing. Foreign investors and in particular those without an office in Japan, have become more cautious and are waiting to see what the implications of the quake are.

  22. 2011.05.09

    First J-REIT PO after March 11 Earthquake announced by Orix:

    Orix JREIT announced that they would make a public offerings this month for new property acquisitions. It is said to raise up to around JPY 13.8 billion in new equity.

  23. 2011.04.28

    Immediate hit from the March 11 earthquake on the economy greater than expected

    According to Bloomberg the Japanese government reports that the immediate hit from the March 11 earthquake on the economy was greater than expected. Factory output fell 15.3% from February, and household spending was down 8.5% compared to March 2010. The Bank of Japan has cut its 2011 economic growth estimate to 0.6% and expects that growth will accelerate to 2.9% in 2012. The report come one day after Standard and Poor’s has put a negative outlook on the nation’s rating. The Tokyo stock market (Nikkei 225) closed at 9,849.74, up by 1.63% its highest since the earthquake. Also the JPY traded stronger at 81.68 to the US$ ad 121.3 to the Euro while the 10 year JGB yields at 1.21%.

  24. 2011.04.26

    Japan’s Challenges

    Under the Title ‘Japan’s Challenges’ the Ministry of Economy, Trade and Industry (METI) has summarized the Domestic and International Implications of Fukushima Dai-ichi Nuclear Power Station. The Presentation covers such areas as:

    – Roadmap towards settling the situation
    – Monitoring of radioactivity levels in the atmosphere, food and water versus long term standard levels, national and international guidelines and daily life exposure
    – Impact on the economy through capital stock damage and possible power shortage

    Japan’s Challenges (2.48MB)

  25. 2011.04.18

    Jones Lang LaSalle issued a report concerning the impacts of the March 11 earthquake on Tokyo office market

    Jones Lang LaSalle issued a report concerning the impacts of the March 11 earthquake on Tokyo office market. They expect rent of Grade A office building in Tokyo to lead the recovery: after a 3-5% decrease in 2011 rents are set to increase 5-10% in 2012. The recovery of Grade B buildings is expected to lag. They also pointed out the following things:

    – Not all but most foreign investors still express positive views towards investment in Japan as a mature real estate market from a mid- to long-term perspective.
    – In terms of business continuity planning, many companies in Japan have started considering the option of splitting their headquarters functions between Tokyo and Western Japan such as Osaka and Fukuoka.

  26. 2011.04.15

    Nikkei Newspaper organized earnings forecast after the March 11 earthquake

    Nikkei Newspaper organized the announcements on earnings forecast after the March 11 earthquake from retail companies and found out that impacts of the earthquake on their sales are generally limited. The total sales of the 68 listed retail companies, whose fiscal year will end at the end of February 2012, are expected to decrease only by 2% compared to the previous year as the sales of many major companies are recovering since the beginning of this April. The majority of Japanese retail companies end their fiscal years at the end of February and most of them had released their forecast by the time Nikkei compiled the figures.

  27. 2011.04.14

    Bank of Japan Governor says the nation’s economy could deteriorate in short term, but will gradually return to the recovery track

    According to NHK the Bank of Japan Governor Masaaki Shirakawa says the nation’s economy could deteriorate in the short term due to the March 11th disaster, but will gradually return to the recovery track. Shirakawa made the comment during a speech in New York on Thursday. He is in the United States to attend a meeting of the Group of 20 Finance Ministers and Central Bank Governors in Washington. Shirakawa said the Japanese economy could deteriorate on a short-term basis due to the impact of severe electricity shortages on corporate activities, as a result of damage to nuclear and thermal power plants. He said the economy should get back on a recovery track once reconstruction of roads and houses begins, which will create a stimulus effect. He said most private economists believe that Japan’s GDP growth rate will turn positive again from the third quarter of 2011. He said: “As time passes, demand will emerge for restoring damaged capital stock such as roads, factories and houses. While it is difficult to accurately forecast the amount and time path of rebuilding demand, the amount of damage to capital stock due to the earthquake and tsunami will be about 3 to 5 percent of nominal GDP and 1 to 2 percent of total capital stock, according to government estimates.

    The following link will bring you to the full speech as well as a presentation by the Bank of Japan ‘Resilence of Society and Determination to Rebuild’

    In the same context BBC reported that the The International Monetary Fund (IMF) has downgraded its predictions for Japan’s economy.The IMF said it expected Japan’s economy to grow by 1.4% this year, compared with a previous forecast of 1.6%.However, it raised its forecast for Japan’s growth next year to 2.1%, saying it was confident Japan would recover from the disaster.

  28. 2011.04.12

    Aeon issued an report on the status of their stores in the area devastated by the earthquake

    Aeon, a major nationwide retail company in Japan, issued an English report on the current status of their stores in the area devastated by the March 11 earthquake. Just 1 month after the earthquake, around 97% of their stores in the area became operational while only 35% could operate right after the earthquake. Following that, they also announced that they expect revenue to be up slightly despite the massive disaster on the 18th of April.

  29. 2011.04.12

    Japan’s nuclear safety agency raised crisis level at Fukushima Daiichi nuclear power plant to 7

    NHK News reports that Japan’s nuclear safety agency has raised the crisis level at the stricken Fukushima Daiichi nuclear power plant to 7, from the current 5. The agency told reporters on Tuesday that large volumes of radioactive substances that could affect human health and the environment are being released in a wide area.
    With this new level assessment Fukushima stands equal to the Chernobyl accident though the agency said the volume of radiation from Fukushima is one-tenth that at Chernobyl. Senior agency official Hidehiko Nishiyama said no fatal radiation casualties accrued at Fukushima. He also said the upgrade does not affect the existing evacuation plan, which was made on the basis of the same radiation evaluation.

    Following the announcement BBC News, Tokyo, writes:
    “Although the Japanese incident now equates to Chernobyl on the international scale, the two accidents are different in a number of important ways. In Chernobyl it was the reactor core itself that exploded, releasing a huge amount of radioactive material in a very short space of time. Fukushima experienced a less critical hydrogen explosion. The initial radiation leak amounted to about a 10th of that which escaped from Chernobyl. The major concern in Japan is that the nuclear plant has not yet been brought under control, and some radioactive material is still seeping out.” (Analysis Rachel Harvey)

  30. 2011.04.08

    Standard & Poor’s issued a report regarding direct impacts of the March 11 earthquake

    Standard & Poor’s issued a report regarding direct impacts of the March 11 earthquake on their CMBSs based on the reports mainly from the loan servicers, and found out there is no serious physical damage on the collaterals. They also explained that only 8 properties have wholly/ partially stopped operation among around 770 collaterals.

  31. 2011.04.01

    Japan Hotel and Resort announced to change their earnings forecast

    Japan Hotel and Resort sponsored by Goldman Sachs announced that they decided to change their earnings forecast in the period ended at the end of August this year because they see their dividends drop by more than 5% compared to the previous forecast owing to the reduction of hotel demand caused by the disaster. They haven’t posted the exact updated figures in the still unclear situation.

  32. 2011.03.24

    Moody’s Japan comments on the direct loss caused by the earthquake

    Moody’s Japan released their comment saying that their estimated direct loss caused so far by the earthquake within all 18 REITs they rate is less than 0.1% of their total portfolio. Further loss could be anticipated caused by the decrease of cash flow/weaker business volume however, Moody’s do not expect such loss to be material and that none of the operators so far have expressed their concerns during the respective interviews Moody’s have conducted with the REITs during the last couple of weeks.

  33. 2011.03.21

    DTZ released their report about the impact of the earthquake

    DTZ released their report about the impact of the earthquake on the Tokyo office market. There will be only a limited and short term impact on the Tokyo office market based on their preliminary analyses, even though their original estimates also showed downward trend this year.

  34. 2011.03.18

    9.0-magnitude earthquake in Japan

    A 9.0-magnitude earthquake occurred off the northeastern coast of Japan on 11 March (Friday). The earthquake, with its epicenter in the Tohoku-Sanriku area, was the largest ever recorded in Japan.

  35. 2011.03.18

    MPC Capital AG stops placement of real estate fund Sachwert Rendite Fonds Japan

    MPC Capital AG, a Hamburg based arranger of closed end funds announced that the firm will stop the placement of its Japan real estate fund Sachwert Rendite Fonds Japan. The fund that MPC has been placing since August 2008 is invested with about Euro 170 Million in 9 mainly regional properties used as shopping, sports and entertainment facilities. MPC gives the uncertainty in Japan after the earthquake as a reason why they decided to stop the further placement now.

  36. 2011.03.17

    Union Investment Real Estate GmbH temporarily suspended redemption and issue of units for UniImmo: Global fund

    Union Investment Real Estate GmbH announced that they had temporarily suspended redemption and issue of units for UniImmo: Global fund, because they judged they cannot currently assess the impact of the earthquake and the nuclear accident in eastern Japan. The properties the fund owns in Japan account for 14% of its total property asset and are all locate in Tokyo. The properties suffered no significant physical damage.

  37. 2011.03.15

    United Urban cancelled the acquisition of 5 properties

    United Urban sponsored by Marubeni cancelled the acquisition of 5 properties for JPY 24.1 billion and JPY 65 billion of public share offering. They cancelled the PO because of their unstable share price after the earthquake. They planned to decide the issuing price the week after the accident. Accordingly, they cancelled the deals because they intended to use some of the money for the acquisitions.

  38. 2011.03.15

    Nikkei Real Estate on the impacts of the earthquake

    Nikkei Real Estate organized the announcements about the impacts of the earthquake that hit northeast Japan on March 11 from each J-REIT as of the morning of March 14 and found out that there was no significant damage to the properties. By the end of March 14, all REITs finished announcing the status of their properties and no major physical damage was seen, though 3 retail properties owned by Mitsubishi UBS REIT stopped operation and some logistics properties owned by Mitsui Trading Company REIT continue to be investigated.

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