Asian property buyers shop in Japan

Hilton Hotels the Hilton Hotel in Japan Niseko village was bought by Malaysia's YTL Corp. for $ 72.3 million. Asian investors have jumped on low prices.

Tokyo - as property prices in Japan below some space long dominated Western institutions has taken up the head for the 19 year in a row, a new generation of investor.

Flush with cash and unscathed by the credit crisis, Asian investors have increased their purchases of Japanese real estate last year. Compared with the astronomical prices in Hong Kong, Singapore and parts of China, reviews are lower - income are less volatile.

Asian companies and individuals have estimated built by $372 million 18 Japan real estate acquisitions in this year, up from eight in the last year according to Dealogic. This compares U.S. buyer three deals in $ 6 million and European buyers to deal with, Dealogic reports. (These figures close deals with private companies and funds.)

Some remarkable 2010 Asian purchases: The Hilton Niseko village, a popular ski resort in Japan's northernmost island of Hokkaido, was from YTL Corp., a Malaysian infrastructure conglomerate for six billion yen ($ 72,3 million); picked up three logistics facilities on the outskirts of Tokyo were Mapletree logistics trust, a Singapore-based real estate investment trust for 13 billion yen in July purchased; and, according to people with matter entrusted, the Hyatt Regency Hakone Resort & Spa from an unnamed retail operations in Hong Kong was purchased in March.

Real estate funds run by the likes of Morgan Stanley, Deutsche Bank AG and Goldman Sachs Group Inc. and private equity firm Lone Star funds fact spectacularly well buying up distressed assets in the years after Japan's bubble burst 20 years ago, as the country's banks dumped their non-performing loans.

Prices turned around even in Tokyo in 2007; Morgan Stanley property business one of the largest revenue generators of Japan company was.

Now, many of the deals are while Tokyo spike dog tagging the US Investment Bank, as property values plunge and hardly remain refinancing options.

Nationwide, according to a survey of the Government, the average price of residential land fell 3.4% June ended in the 12 months, and the average for commercial land fell 4.6%. This becomes Western banks and funds have in their proprietary investment held since the global credit crisis - and Asian investors have rushed to fill the gap.

Hyatt Hotels Hyatt Regency Hakone Resort & Spa

Raymond Wong "Asian investors have not suffered much during the down cycle, and you have not indebted,", said executive Director of Saizen riding a Singapore-based real estate investment trust, 180 residential real estate in quite Japan managed. "Japan returns are attractive by any standard, and the interest rates are so low." "Asian investors are so flush with cash, you have no choice but to Japan view."

We get some take up space that used to Western capital, be dominated, said Ben Cha, the Chief Executive of HKR Japan, who is busy fly back and forth between Tokyo and Hong Kong HKR International Group, the local offices in Hong Kong-based real estate development company established, is a family business. "It's a trend that around will be for a while." "We provide capital."

Investors said that residential real estate in Tokyo, the yield - expected 4.5% to 5%, compared to a property of the annual net profit as a percentage which is value - less than 3% in Hong Kong.

"The returns of residential assets in Japan is very stable - we have had a lot of highly volatile growth in China and Hong Kong," said Mr. Cha. "The relative prices in Japan is attractive." "There is a lot of volatility in the Chinese market and policy factors that nobody can predict."

HKR this year bought three residential buildings in Japan for nine billion yen, and Mr. Cha said the company aims to expand the Japan portfolio. Credit conditions in Japan, land of the zero interest rate have started as also help: new loans from banks for real estate in the July-September quarter compared to the same period of last year, according to a survey by Deutsche Bank real estate fund, 6.6% RREEF called increased.

Industry, players said that it more Asian buyer, you have the purchasing power according to the scale of the offerings which have made the Western institutions before the collapse of Lehman Brothers.

In June 2007, Morgan Stanley real estate funds unit known as Msref industry Castle taking 13 hotels and two property management units which at the moment - a billion yen, $2.4 billion known as ANA all Nippon Airways Co. for Swisslog record for a Japanese real estate deal. But Asian investors tend longer-term buyer as Western funds that focus usually when an investment in three to five years.

"I expect the trend continue next year", Michael Bowles, National Director of Asia said capital markets for Jones Lang LaSalle. "If you you quick view of what is happening in the region on the dynamic economic growth in China, a growing middle class with disposable wealth seeking to diversify your assets see." "It is to have a good-quality residential asset in Tokyo prestige."

Write toMariko Sanchanta at the mariko.sanchanta@wsj.com

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