Japan still here and growing

May 17, 2013 admin

Just over two years ago, a 9.0 earthquake struck off the coast of Japan, with added destruction from resulting tsunami and nuclear disasters. Since then, Japan has undertaken reconstruction efforts on a scale not seen since the end of World War II. Japan is struggling to rebuild communities and to clean up radiation from the Fukushima Dai-ichi nuclear plant.

It has been confirmed at least 20,851 people died or remain missing. This figure includes the confirmed number of dead, 15,881; those who are missing, 2,668; and 2,303 others who subsequently died.

Japanese government data show about 315,000 people were still living in temporary housing at the end of February. There are plans to build 23,000 public housing units in eight prefectures for those who are unable to rebuild their homes.

Many areas have achieved some sort of normality, but it is still a slow recovery. However, primary cities outside the damaged areas, such as the country’s capital, Tokyo, are striving and still attracting a vast amount of real estate investors. On the acquisitions side, Idera Capital Management and Sparinvest Property Investors A/S acquired a portfolio of four well-located residential properties for middle-income tenants in Nagoya upon the first closing for their investment program for approximately ¥4.5 billion ($50 million). The partnership intends to acquire additional quality residential properties in major urban cities.

U.S. REIT Prologis has boosted its Japanese portfolio with a development project, Prologis Park Kitamoto, a 795,000-square-foot, four-story facility. The property is located within 29 miles of Tokyo’s central business district, and the project is slated to complete in early 2014.

Goodman Japan Development Partnership, a 50-50 joint venture between Goodman Group and Abu Dhabi Investment Council, acquired a 279,862-square-foot development site in Nagoya, Japan, which it will develop into a four-story, 548,959-square-foot logistics and distribution facility.

Tokyo Office Property Fund, a fund managed by AXA Real Estate Investment Managers, completed the acquisition of Kyobashi Square, a core building located in the Chuo-Ku district of central Tokyo, from Godo Kaisha Kyobashi Property. And prior to that, the fund had made its first purchase — Shinjuku Sanchome located in the Shinjuku ward of central Tokyo.

And Singapore-listed Ascott Residence Trust has acquired three prime serviced residences in China and a stable portfolio of 11 rental housing properties in Japan for $287.4 million.

Investors are forming partnerships to invest in the country. The Canada Pension Plan Investment Board and GE Capital Real Estate recently formed the Tokyo Office Venture targeting investment in mid-size class A and B office properties in key CBD submarkets.

Hopefully the growing investor interest so far this year will spread outside primary cities and development projects will begin on Japan’s coast. Either way, two years after a natural disaster, Japan is still here.

Andrea Waitrovich is web content editor of Institutional Real Estate, Inc.

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