Japan Real Estate Report Q4 2012

Date: September 26, 2012
Pages: 66
Price:
US$ 1,295.00
Publisher: Business Monitor International
Report type: Strategic Report
Delivery: E-mail Delivery (PDF)
ID: JF1608216D2EN
Leaflet:

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The Japan Real Estate report examines the commercial office, retail, industrial and construction segments throughout the country in the context of reconstruction efforts post-Tohoku coming to fruition. With a focus on the principal cities including Tokyo, Osaka and Yokohama, the report covers the rental market performance in terms of rates and yields over the past 18 months and examines how best to maximise returns in the commercial real estate market, while minimising investment risk and exploring the impact of the completion of new supply on a market which was surprisingly resilient in the wake of the earthquake and tsunami in 2011. Our most recent round of in-country interviews (conducted in July 2012) showed that rents continue to struggle with stability across all sub-sectors.

There is a further downside risk in the industrial sector, in the form of a rebound in April 2012 for global economic concerns. Manufacturing sentiment continues to decline and industrial production decline by 0.5% year-on-year (y-o-y) in June. The electronics industry in particular is seeing pressure from an increase in regional competition. The retail sub-sector, as with many in the region, has shown surprising resilience and is likely to buoy the overall market in a period of caution.

Key Points:
  • Mixed results from economic indicators in Q212 suggest that growth is not firmly rooted in the economy, leading us to maintain our belief that the annualised 2.8% real GDP growth in Q112 is likely to fade. The lack of widespread growth and the impending power shortage in Japan's summer months points to lacklustre performance for the rest of 2012. While we have maintained our 2012 growth forecast at 1.4%, which is far below market consensus of 2.4%, we remain wary of the increasing risks of recession as external demand continues to deteriorate.
  • Residential and non-residential building activity will pick up notably in 2012 as the bulk of post- Tohoku reconstruction work is realised within the sector. We expect the sub-sector to grow by 3.4% in 2012 – following 0.9% growth in 2011 – as strong growth in project orders last year is converted into work done. However, given the factors behind this pick-up in activity, we do not see this level of growth being sustained. Indeed, from 2013 onwards we expect the sector to stagnate as chronically weak domestic demand and sluggish economic growth weigh heavily on the industry.
  • The combination of lower base effects and weak construction activity in 2011 have prompted us to revised down our construction real growth estimates for 2011 to 0.5% (from a previous estimate of 2.0%). However, we continue to believe that the robust growth in construction orders following the Tohoku natural disaster in March 2011 would translate into greater construction activity in 2012 and 2013. Economic data for Q112 reflects this view and, as such, we are maintaining our forecasts for Japan's construction sector, with real growth expected to reach 4.1% and 1.8% in 2012 and 2013 respectively.
Executive Summary
SWOT Analysis
Japan Real Estate/Construction SWOT
Japan Political SWOT
Japan Economic SWOT
Japan Business Environment SWOT
Real Estate Market Overview
Market Analysis – Office
Supply And Demand
Rents And Yields
  Table:. Historic Rents – 2011-2012 (US$/per m2/month)
  Table: Net Yield, 2011-2012 (%)
  Table: Terms Of Rental Contract/Leases – H112
Industry Forecast Scenario
  Table: Forecast Rents – (US$ per m2/month)
  Table: Forecast Net Yield, 2008-2016 (%)
Market Analysis – Retail
Supply And Demand
Rents And Yields
  Table: Historic Rents – 2011-2012 (US$/per m2/month)
  Table: Net Yield, 2011-2012 (%)
  Table: Terms Of Rental Contract/Leases – H112
Industry Forecast Scenario
  Table: Forecast Rents – (US$ per m2/month)
  Table: Forecast Net Yield, 2008-2016 (%)
Market Analysis – Industrial
Supply And Demand
Rents And Yields
  Table: Historic Rents – 2011-2012 (US$ per m2/month)
  Table: Net Yield, 2011-2012 (%)
  Table: Terms Of Rental Contract/Leases – H112
Industry Forecast Scenario
  Table: Forecast Rents (US$ per m2/month)
  Table: Forecast Net Yield, 2008-2016 (%)
Forecast Scenarios
Infrastructure Report
  Table: Japan Construction And Infrastructure Industry Data, 2008-2016
  Table: Japan Construction And Infrastructure Industry Long-Term Forecasts. 2013-2021
  Table: Value Of Construction Orders Received (Infrastructure), JPY100mn
Macroeconomic Outlook
  Table: Japan – Economic Activity
Real Estate Risk Reward Ratings
Real Estate/Construction Risk/Reward Ratings
  Table: Asia Pacific Real Estate Risk/Reward Ratings
Japan’s Business Environment
Japan Real Estate Report Q4 2012
© Business Monitor International Ltd Page
  Table: BMI Business And Operation Risk Ratings
Institutions
  Table: BMI Legal Framework Rating
Infrastructure
  Table: Labour Force Quality
Market Orientation
  Table: Asia, Annual FDI Inflows
  Table: Trade And Investment Ratings
Competitive Landscape
Company Profiles
Kajima Corporation
Kumagai Gumi
Obayashi Corporation
Shimizu Corporation
Demographic Data
  Table: Japan's Population By Age Group, 1990-2020 ('000)
  Table: Japan's Population By Age Group, 1990-2020 (% of total)
  Table: Japan's Key Population Ratios, 1990-2020
  Table: Japan's Rural And Urban Population, 1990-2020
BMI Methodology
How We Generate Our Industry Forecasts
Construction Industry
Bank Lending
Real Estate/Construction Business Environment Rating
  Table: Weighting Of Indicators
Sources

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