JAPAN - Almost all institutional real estate investors in Japan are planning to look for new investment opportunities in the next year, according to a survey.
The twice-yearly Japanese Real Estate Investor Survey quizzed 89 firms in October and found that 93% of them planned new investment in the next 12 months.
Just 4% of respondents had no plans for new investment, the survey conducted by the Japan Real Estate Institute found.
Among other findings was the fact that 73% of respondents were involved in acquisitions over the past six months.
The favoured type of property recently acquired was non-class A office buildings, followed by standard studio apartments, Class A office buildings, standard multi-family, downtown retail property and suburban shopping centres filling the top six investment market places.
The investment shopping list still desired sees a shift towards Class A office buildings in slight preference to non-Class A office buildings, with downtown retail, standard studio, standard multi-family and suburban shopping centres, all sought after by half of the respondents.
The initial Cap-rate required by substantial investors in the Japanese real estate market place is an expected 4.5% p.a.
"With commercial land prices peaking in September 1990 and falling over the next 15 years to some 15% of the peak's value, a bottoming out now appears to have been reached with minor increases in commercial land prices being recorded in certain of the larger cities in Japan," said ResearchWorldwide.com.
The Tokyo Stock Exchange's real estate sector indices jumped 10.15% for the month of October 2005, compared to September 2005. The third quarter of 2005 already saw a 28.55% rise.
Firms surveyed included pension funds, life insurers, real estate brokerages, banks and other financial institutions.
The Japan Real Estate Institute was founded in 1959 as an independent, self-funded, non-profit research organization.