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Global investors look to Japan for stable returns

Investors from all over the world are looking to the Japanese property market for deals as they look for stable returns amid a weak global economy.

Industry officials say large investors from the US such as Blackstone and Fortress Investment, European pension funds and Asian developers are searching investment opportunities in Japan in spite of the recent earthquake and nuclear crisis.

The Financial Times reported CBRE Consulting executive director, Andy Hurfurt as saying: “The number of visitors I have had in the past two weeks [from overseas investors] … has increased quite dramatically over a month ago.”

Japanese property market

A successful Japanese real estate market was hit by a series of detrimental events starting with the collapse of Lehman Brothers. In March of this year, the island state was hit by an earthquake and subsequent tsunami as well as the accident at the Fukushima nuclear power plant. The Japanese economy dipped and hordes of foreign residents left the country.

Interest is now returning and many of the overseas investors that did not default on their real estate mortgages are now hoping to sell them.

Compared to the surging prices in Singapore and Hong Kong which seem to have fully recovered after the global downturn, many investors believe full recovery is yet to be seen in Japan and now is the time to invest.

Japanese property market

South East Asia is experiencing similar interest from overseas investors looking for a place to put their funds outside of the challenged US and Euro-zone, according to DTZ Research.

Mr Hurfurt of CBRE Consulting warns that the growing interest from overseas investors will have to compete with domestic groups, particularly from Japanese real estate investment trusts (J-Reits).