Cerberus Exits Kokusai Kogyo Investment

Cerberus Capital Management has exited one of its two remaining investments in Japan, a majority stake in property company Kokusai Kogyo.

The deal was valued at as much as ¥140 billion (€1 billion; $1.37 billion), according to media reports. Cerberus did not comment on the sale, but the reports have stated that the private equity firm has offloaded its remaining 55 percent stake in Kokusai to the company’s founding family. The price has been placed at between ¥130 billion and ¥140 billion.

Cerberus originally bought a 65 percent stake in Kokusai in 2004 for an undisclosed amount. It was also reported at the time that Cerberus bought approximately ¥500 billion in loans to the Japanese company for a 50 percent discount, from lenders including the UFJ Group, formerly Japan’s fourth largest bank that was bought by Mitsubishi Tokyo Financial Group in 2005. 

Cerberus does not have a dedicated real estate fund for Asia.

The Kokusai exit marks Cerberus’ second major exit in Japan in two years, after the firm reportedly raised about JPY 146 billion (€1.2 billion; $1.7 billion) by selling its shares in Japan’s Aozora Bank. 

Cerberus also sold out of its Japanese love hotel investments in 2013.

This exit leaves Cerberus with only one major investment in the Japan market: a one-third stake in railroad and hotel operator Seibu Holdings.

PERE New

Tokyo's Real Estate Market Back to Life

After decades drowning in deflation, Japan’s property market is re-emerging, with average prices for new condos in Tokyo hitting levels not seen since 1992, the Real Estate Economic Institute said this week. If the trend continues and broadens, it could mark a turnaround in the long-dormant financial fortunes of the world's third-largest economy.

Such a turnaround is long overdue: Japan’s real estate prices have been falling for nearly 25 years. From 1990 to 2002, falling real estate prices swallowed an estimated $9.3 trillion of the nation’s wealth, according to the Nomura Research Institute.

Now there's evidence from various sectors that the real estate market is rising.

1. Tokyo’s new condo sales grew 31 percent between May and December 2013, compared to the same period in 2012. The average price of new condos in Osaka rose by 8.8 percent in June 2013 from a year earlier, Global Property Guide said late last year

2. Resale prices are also rebounding, although at a slower pace. Sales of existing condos in and surrounding Tokyo grew 17 percent between May and September last year compared with the same period a year earlier, according to Real Estate Information Network for East Japan. The Tokyo Stock Exchange Home Price Index grew 3.3 percent in October from a year earlier. That’s still 11 percent below the precrisis 2007 peak and 59 percent below June 1993 prices, the earliest data available.

3. Though overall land prices are still falling-- average property prices are still 71 percent below their peak in 1991, according to a report released last week by the Bank of Japan-- land prices near major metropolitan areas are increasing. From June 2012 to June 2013, the average price of land in the Tokyo area grew by 5.2 percent, according to the Land Institute of Japan. In the Osaka area, the average land price grew by 2.3 percent in the same period.  According to a Japanese government survey, more than two-thirds of major urban areas saw their property values rise last summer. In July, Moody’s upgraded its rating of Japan’s property market from negative to stable.

4. Residential construction is increasing. The number of new home buildings increased by 8.6 percent to 451,063 in the first half of 2013, compared to the same period last year, according to the Ministry of Land, Infrastructure, Transport and Tourism.

5. If Japan's fiscal and monetary efforts to stimulate the economy succeed -- including the Bank of Japan's goal of inflation climbing to 2 percent -- interest rates will rise, lowering the cost of fixed-rate mortgages and, thus, motivating potential borrowers to take out loans that can be paid back with ever-cheapening money.

The road ahead could be bumpy. New home sales may be up now because of a planned sales-tax hike in April. But even with a tax hike in April, the real estate recovery may continue: Unlike the last sales-tax hike in April 1997, Japan’s economic policies under Prime Minister Shinzo Abe have raised expectations for higher prices ahead and encouraged businesses to invest more. To offset any negative impact from the tax hike, the Abe administration is preparing a stimulus package of up to 5 trillion yen (about $48.3 billion).



http://www.ibtimes.com/five-signs-japans-long-dead-real-estate-market-has-finally-come-back-life-1546719

Japan's Expects 1.4% GDP Growth in 2014

http://economictimes.indiatimes.com/news/international/business/japan-expects-economic-growth-at-1-4-per-cent-for-next-fiscal/articleshow/29304663.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

Asian Association for Investors in Non-Listed Real Estate Vehicles (ANREV) Reports Japan Office is favourite country/sector for foreign investors

The seventh edition of the Investment Intentions Asia Pacific Survey is marked by a sharply higher number of respondents, with investors now representing more than half of the total respondents. This year, allocations to non-listed property funds will continue to increase. Investors show a slight preference for value added funds, and clear interest in multi country/sector funds suggesting an appetite for increased risk. Japan office is the favourite country/sector combination for investors to invest.

ANREV 2014 Report

TEPCO returns to profits on 8.5% higher electricity charges

TEPCO operator of the wrecked Fukushima Dai-Ichi nuclear power station, returned to profit in the first nine months of its fiscal year after raising customers’ electricity rates and cutting costs.

Operating profit was 231.3 billion yen ($2.25 billion) in the nine months ended Dec. 31, compared with an operating loss of 114.5 billion yen a year earlier, according to a statement today from the company known as Tepco.

The return to profit was led by increased revenues after the utility, which serves 29 million customers in the Tokyo metropolitan area, raised electricity rates for households by 8.5 percent in September 2012. The increase boosted electricity sales by 9.9 percent to 4.3 trillion yen.

Net income was 772.9 billion yen after a government injection into the utility’s fund for payouts to people and companies affected by the Fukushima disaster in March 2011.

Tepco’s operating profit target for the year ending March is 134 billion yen, compared with an operating loss of 222 billion yen the previous year.

Tepco cut staff and deferred repair work to keep expenses from ballooning, despite increased fossil fuel purchases to make up for lost nuclear capacity amid a depreciating Japanese currency, the utility said. Ordinary expenses rose 1.9 percent to 4.67 trillion yen, compared with a 12.3 percent increase the previous year.

The company expects to pay a record 2.9 trillion yen for fuel in the current fiscal year, during which all of its nuclear reactors were offline for safety checks after the Fukushima disaster, up from 2.7 trillion yen a year ago, Managing Executive Officer Katsuyuki Sumiyoshi said today at a press conference.

Bloomberg