Tokyo Offices deliver double-digit negative capital return, says IPD

The annual capital return for Japanese real estate investments was -11.8% to the end of the second quarter of 2009, according to the IPD Japan Monthly Indicator.

This new figures continues the downward return trend over recent months, bringing the annual total return to end of June 2009 to -7.3%. The income return stands at 5.0%, a level comparable to last quarter.

Sector level returns are shown in the Monthly Indicator to the end of February 2009. On a six-month annualised basis, the Office sector shows a negative total return of -7.2%, 152 basis points down from the previous month. Capital returns in this sector drop further by 148 basis points to -11.6%. The Retail sector’s annualised capital return for the six months to February 2009 fell another 110 basis points, to -15.3%.

Toshiro Nishioka, Managing Director at IPD Japan, said: “Capital returns for Tokyo and Yokohama/Kawasaki Offices show a double-digit negative return for the first time since the inception of the index, with -11.3% and -10.0% respectively. However, the downward trend of returns across sectors seems to be slowing down.

“In the Residential sector, annualised capital growth for the last six-month period to February 2009 is -12.7%. With a drop of 48 basis points compared to one month earlier, residential property shows the most modest decline across sectors.”

source : IPD