Japanese commercial property returns slow says IPD Indicator

IPD has released its results for Japanese real estate to the end of August 2008. The IPD Japan Monthly Indicator reveals indicative total returns for the 12 months to the end of August 2008 stands at 6.1% down from 6.9% in July 2008.

Capital return stands at 1.1 % - a continuous drop for 14 consecutive months. Indicative annualized total return for the six months to August 2008 shows capital return turning negative on All Property level, at -1.3%.

IPD can now compare performance, based on valuations of 99% of properties in the IPD universe up to April 2008. Over the 12 months to April 2008, the office sector remains the best performing sector with a total return of 11.8%. However, with a drop of 95 basis points, offices have seen the biggest decrease in total return amongst all sectors compared to one month earlier.

Although falling, Tokyo offices maintained it strong position among various sectors and geographical areas with a total return of 12.6% to April 2008, while industrials, at 11.9%, was the second best performing sector.

Toshiro Nishioka, Managing Director at IPD Japan, said: "For the first time in the history of the Index, retail no longer outperforms residential on a nationwide level. Total return to April 2008 drops to 5.7% for retail. Indicative three-month annualized figures show a stop in positive total returns on retail outside Tokyo, which was 0.0%, driven by the worsening performance of shopping centers."

Source: IPD

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