Wednesday, May 13, 2015

GE to Sell $5 Billion Japan Commercial Finance Operation

General Electric Co. is putting its $5 billion Japanese commercial finance operation up for sale, shedding a key piece of GE Capital’s Asia operations as part of the company’s efforts to slim down, according to people familiar with the situation.


Blackstone, PAG eyeing bids for Japan's Simplex in deal seen worth $1.25 bln

Blackstone Group, Hong Kong-based investor PAG and Japanese property firm Hulic Co are among potential bidders for property asset manager Simplex Investment Advisors in a deal that could fetch around 150 billion yen ($1.25 billion), people with knowledge of the matter said.
U.S.-based property investment fund Aetos Capital Real Estate has put Simplex up for sale, the people told Reuters, with a first bidding round to close by the end of this month.
The deal comes as foreign investors with plentiful capital are looking for investment prospects in Japan even as the number of potential targets falls. Borrowing costs are low and the yen has fallen almost 60 percent against the dollar from a record high in 2012, making Japanese assets much cheaper for U.S. investors.
Meanwhile for potential Japanese bidders like Hulic, the acquisition of Simplex, which also owns Simplex REIT Partners, the manager of real estate trust SIA Reit Inc, could pave the way for expansion on their home turf.
Officials from Blackstone, PAG and Hulic declined to comment.
Aggressive monetary expansion policies taken under Prime Minister Shinzo Abe during his two and a half years in office have driven up the value of property and other assets.
"Japan's market has heated up too much now and the number of investment opportunities are limited," said a property broker who is not involved in the deal. "Property owners do not want to sell their assets and even if they do, the price is too high."
Simplex's assets include a hotel near Tokyo Disney Resort and a 12-storey office building in Tokyo's Toyosu district, near a venue for the 2020 Tokyo summer Olympic Games. It also owns a 9-storey office building in Tokyo's posh Aoyama district.
Aetos has hired Mitsubishi UFJ Morgan Stanley as a sale adviser. A spokeswoman for the bank declined to comment.


Sunday, October 12, 2014

禁止地域でラブホテル営業 経営者らを書類送検へ 兵庫県警 - Police action against GHP (Kato Pleasure Group company)

神戸市内の住宅街で、ラブホテルが禁止地区に「旅館」として営業していた問題で、兵庫県警生活環境課などは14日、ホ テルを経営している大阪市天王寺区の経営コンサルタント業「GHP」代表の男性(39)ら3人と、同社を15日にも風営法違反(禁止区域営業)容疑で書類 送検する方針を固めた。「偽装ラブホテル」の立件は異例という。

In the residential area of Kobe city, in an area where Love Hotels are prohibited, there was an incident of a Love Hotel operating under a ryokan license. On the 14th, the Hyogo Prefectural Police  served a summons of breach of the Adult Entertainment Law to 3 officers of the Osaka office of the hotel operator, called "GHP" GHP ウェブサイト

Investigators allege that according to their investigations, that the accused have around mid January this year, in Chuo-ku, Kobe, Yamamotodori, operated a love hotel business called Chapel Suite Chapel Hotels ウェブサイト, even though this is prohibited in this area under the Adult Entertainment Laws.  while they had only received the permission of the city to operate as an Inn, they were in fact operating a love hotel de facto.

In January this year, prefectural police searched the hotel. They found that in contravention of the laws, there were vending machines for adult toys, that room rate is displayed on the outside of the flashy building, there is no hotel guest roster as is required for inns business hotel in the Hotel Business Law. According to these matters, it was determined to have been opearting as a love hotel.

According to city, after receiving the search, the hotel that was reopened by improving the structure and equipment.

Thursday, September 4, 2014

Tokyo Property Deals Surge as Rising Rents Lure Buyers

Investment in Tokyo properties is surging on prospects that rents will rise, boosting returns, even after a 20 percent gain in prices since Japanese Prime Minister Shinzo Abe took office almost two years ago.

“There is a sense of value here that you don’t find in other major office markets,” said Jon Tanaka, Tokyo-based managing director of Angelo Gordon & Co., an alternative asset manager with about $27 billion in assets. “Japanese and offshore core buyers have capital available and they are very eager to find investment opportunities in Tokyo.”

Real estate investment in Japan rose 70 percent to 4.6 trillion yen ($44 billion), the highest level since March 2008, in the 12 months ended in March from a year earlier, according to a report published in July by Deutsche Asset & Wealth Management. Among deals in the past week, a unit of China's Fosun Group acquired the Citigroup Center building in Tokyo and Mori Trust Co. bought an office and banquet hall complex (Meguro Gajoen) in the capital for more than a $1 billion.

Office rents for the best buildings in Tokyo are estimated to rise by about 30 percent over the next three years, giving potential investors a chance to capitalize on rental incomes, according to CBRE

While Abe’s efforts to revive the nation’s economy and end more than a decade of deflation have led to a recovery in the property market, prices in Tokyo, the world’s third-biggest real estate investment market, are still 20 percent below their 2007 peak, according to an estimate by Deutsche Asset. In an effort to restore economic momentum, Abe reshuffled his cabinet today, 20 months after taking office.
The Topix Real Estate Index tracking 45 property-related companies rose 0.6 percent to close at the highest since Aug. 1 in Tokyo.

Relative yields on office acquisitions that are higher than in other major international cities also are luring investors. The difference between the return on equity and long-term interest rates is more than 400 basis points above 10-year bond yields, according to Deutsche Asset. That compares with less than 100 basis points in Singapore and Hong Kong, and 200 basis points in London and New York.

Private real estate investment trusts, which started in Japan with $200 million of assets under management in 2011, have expanded and become key investors in the property market, said Koichiro Obu, the head of research and strategy in the Asia-Pacific region at Deutsche Asset.

Total assets under management by private REITs rose 46 percent to $6.75 billion as of March 2014 from a year earlier, according to the German bank’s report. Pension funds probably account for 30 percent of investments in private REITs, Obu said.

“It used to be hard for pension funds to invest in private REITs because they were very small,” Obu said. “Now they have gained in size and established a track record, investments from pension funds have begun to flow into the private REITs.”

Acquisitions by Japanese REITs accounted for about half of the $34.5 billion in transaction volume in the year ended June, while foreign capital accounted for 16 percent, according to an estimate by Deutsche Asset.

“The market is heating up,” said Kunihiko Okumura, regional director of acquisitions at LaSalle Investment Management, with $50 billion of assets. “The competition among core investors, REITs and private REITs has intensified.”

The biggest transaction in Japan in the second quarter was Tobu Railway’s purchase of two Tobu department stores for 103 billion yen, according to the report. Other large transactions included the purchase of Kokusai Akasaka Building by Sekisui House, Japan’s second-biggest homebuilder, for 74 billion yen, it said.

Angelo Gordon’s strategy is to renovate vacant buildings and boost occupancy rates, Tanaka said. It acquired 67 percent of Sphere Tower Tennozu, an office building near Tokyo Bay, in December from Global One Real Estate Investment Co. for 9.5 billion yen. The New York-based firm plans to refurbish the building, which currently is less than 40 percent occupied, and sell after leasing it, he said.
More properties are being put up for sale as prices rise. Idera Capital Management, a unit of Fosun, China’s biggest closely held conglomerate, acquired the 25-story building completed in 1992 in Tokyo’s Shinagawa ward, according to a statement on Idera’s website dated Aug. 27.

Mori Trust, Japan’s second-biggest closely held developer by sales, said on Aug. 29 it acquired the 37,000 square meters (398,265 square feet) Meguro Gajoen in central Tokyo, known for its gardens and as a favored wedding location. Mori paid about 130 billion yen to buy the property from Lone Star Funds, people familiar with the deal said, asking not to be identified because the information is private. Mitsubishi Estate, Japan’s biggest developer by market value, said a special purpose company it partly owns is seeking to sell a stake of more than 10 percent in an office complex next to Tokyo Station for 43 billion yen.

The capitalization rate, a measure of investment yield, for office buildings in Tokyo fell to the lowest level since August 2009 in June, according to New York-based Real Capital Analytics Inc. The yield declined to 4.80 percent in June from 5.04 percent a year earlier. A drop in the cap rate, which is derived from a property’s net income divided by the purchase price, usually signals an increase in prices.

Not all are expecting prices to continue rising. The rate for office buildings in Tokyo’s central five wards is about 4.4 percent and it probably won’t decline further, according to Yoko Fujinami, an analyst at IB Research Inc. in Tokyo.
“Even as prices for office building are rising, rent growth hasn’t caught up,” said Fujinami. “That will keep the cap rate from falling further.”

The nation’s largest developers such as Mitsui Fudosan and Mori Building Co. also are announcing plans to re-develop their properties as they expect demand to rise.

Mitsui Fudosan, Japan’s biggest developer, raised about 330 billion yen in its first share sale in 32 years, saying that the real estate environment has changed “dramatically” since December 2012, when Abe came to power. The proceeds will be used for property development, it said.

Mori Building, Japan’s biggest closely held developer, said in June it plans to develop about 10 projects in central Tokyo worth an estimated 1 trillion yen with partners as the city prepares for the Olympic Games in 2020.

“Development projects for under-utilized land will lift up property values in those area,” said Hiroshi Okubo, executive director and head of research at CBRE. “That will in turn boost the attractiveness of Tokyo.”

Rents for grade-A buildings in Tokyo in the second quarter gained at the fastest pace since CBRE started compiling the data in 2005. Japanese banks’ lending for the property industry remained at the highest level since June 2007 in the second quarter, according to the Bank of Japan’s Tankan Survey.

“We are in an early stage of a cyclical recovery,” said Angelo Gordon’s Tanaka. It is “mainly driven by improved fundamentals in the market place, increased investor confidence, as well as lenders’ confidence in the market.”


Tuesday, June 10, 2014

2014 Q1 Japan GDP Growth 6.7% Annualized

Japan's economy grew at a quicker pace than estimated in the first quarter, as business spending increased more than previously reported.

GDP grew an annualized 6.7% in the Q1, the Cabinet Office said in Tokyo today, faster than a preliminary 5.9 percent and the median forecast of 5.6 percent by economists in a Bloomberg News survey. The nation’s current account surplus narrowed in April from a year earlier, separate data showed.

Increasing strength in business investment would help the economy rebound from a forecast contraction this quarter after a sales tax increase in April. A rebound in consumer confidence last month signals Prime Minister Shinzo Abe may be able to sustain the recovery’s momentum to weather a planned further rise in the levy.

“Expectations for fiscal and monetary stimulus this year are fading,” said Izumi Devalier, a Japan economist at HSBC Holdings Plc. “The slowdown in the second quarter doesn’t look catastrophic, and the question now is how fast the pick up will be after then.”

Business investment rose 7.6 percent from the previous quarter, revised up from a preliminary 4.9 percent increase.

Consumer spending climbed 2.2 percent, more than an initial estimate of a 2.1 percent gain. Separate data today show consumer confidence rose in May for the first time in six months.

Sales Tax

Consumer confidence rose to 39.3 in May, the highest since January, according to separate data today. Expectations for two-to-three months in the future among workers such as taxi drivers, supermarket managers and restaurant workers rose to the highest level since December, after jumping last month by the most since the survey began in 2000, a different poll today showed.

Economic Contraction

The economy will contract 3.5 percent in the April-June period before expanding 2 percent next quarter, according to a separate Bloomberg News survey conducted prior to today’s release.

Prime Minister Shinzo Abe will base a decision on raising the sales tax to 10 percent from 8 percent on July-September data.


Wednesday, May 28, 2014

Konami Puts it hand up to partner with overseas Casino Operators in Japan

Japanese gaming company Konami Corp said it was planning to invest in casinos in anticipation of legislation to legalise gambling and help create an entertainment and resort market some estimate to be worth over $40 billion.

Liberal Democratic Party lawmakers are trying to pass legislation allowing the development of casino resorts in Japan, although time is running out for a bill to be approved in the current parliamentary session ending next month.

Konami said it would set up a subsidiary, once a casino bill is passed, through which it would take a minority stake in casinos in partnership with operators.
Companies like Melco Crown Entertainment, MGM Resorts International and Las Vegas Sands Corp have expressed interest in investing in Japanese casinos.
The country is one of the world's last untapped gaming markets and broker CLSA says it could become a leading gambling destination with annual revenue over $40 billion.

Supporters of the casino bill want the first resorts to open by 2020 when Tokyo hosts the Olympic Games.

Konami sells game software and "pachinko" pinball machines in Japan, but also distributes slot machines overseas, experience that Konami executive Noriaki Yamaguchi said would help it partner with casino operators looking to enter the Japanese market


Japanese Corporate Taxes to go below 30%

Japanese Economic and Fiscal Policy Minister Akira Amari indicated Monday that the government will consider stating a cut of the effective corporate tax rate to below 30 pct in new policy guidelines to be drawn up possibly in June.

Regarding a proposed corporate tax cut, Amari told reporters that he wants the new economic and fiscal policy guidelines to state its timing and size as concretely as possible. He met reporters at Tokyo International Airport at Haneda before leaving Japan on a tour to France and Britain.

Lowering the tax rate from the current level above 35 pct to less than 30 pct would have an impact on the market, Amari said.