Japanese real estate markets annualized return to February 2009 was -3.0%, according to the IPD Japan Monthly Indicator. The annualized total return was comprised of a -7.6% capital return, a new record low down 129 basis points since December, offsetting the 11th consecutive stable income return, at 4.9%.
The unfrozen Indicator, which improves its historical accuracy on a monthly basis as additional valuations are collected, reveals that the revised annual returns for the 2008 calendar year were -0.3%.
On the same annualized total returns basis, the weakest sector returns were Retail, at -7.3%, which have been negative for five consecutive months, followed by Residential, at -5.0, while Offices has fallen negative for the first time, at -1.0%.
The preliminary returns for Japanese real estate to February 2009 are also accompanied by more comprehensive annualized total returns to October 2008.
Toshiro Nishioka, Managing Director at IPD Japan, said: "The fuller figures revealed that the Office sector still remained the best performing of the three main sectors, just within positive territory at 0.1%. Office capital return, annualized to end of February 2009, dropped by 188 basis points to -4.5%, the biggest fall in the sector's history. Offices in Tokyo, in particular, showed a negative capital return of -3.5% for the same period."
"The Retail sector's return has now reached double-digit loses, at -10.1% although it fell slightly less than other sectors. Finally, the Residential sector showed a continuous and similar steep downward trend. While all regions saw capital returns fall further, Osaka recorded the biggest drop at 176 basis points in October 2008."