GERMAN INVESTORS' INVOLVEMENTS IN JAPANESE REAL ESTATE AND THEIR FUTURE PROSPECTS

Yuko Tomizuka

ERES from European Real Estate Society (ERES)

Abstract: The reasons why German investors have been active in Japanese real estate market since late 2007, when the market started declining in Europe, are considered to be 1. Favorable exchange rate, 2. Long term stability in property value and cash flow, and 3. Debt availability. In this paper, the future trends of exchange rates and their impact on existing investments in Japan are analyzed first. Secondly, it will further be discussed why long term stability has been sought by these investors and how this stabilization is assessed. Among many factors which affect the real estate market stability like political system and reliable regular and legal structures, long term GDP growth is assessed to estimate the stability of property value. Thirdly, clarifying the difference of funding structures between Japan and German and analyzing German lenders of intentions and criteria of financing in relation to the typical fund raising scheme, the further growth of debt availability should be mentioned. Comprehensively assessing future trends of these three factors, the prospects on German investors of involvements in the Japanese real estate market ought to be discussed.

JEL-codes: R3 (search for similar items in EconPapers)
Date: 2010-01-01
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Persistent link: https://EconPapers.repec.org/RePEc:arz:wpaper:eres2010_256

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