Ever since the rupture of the bubble economy, the Japanese real estate investment environment has been in dire straits. But now that investors can no longer count on speculative price gains, new needs are emerging for sound real estate investments as a means of diversifying asset portfolios in the face of prolonged low interest rates.
However, before real estate can be considered a suitable investment, Japan needs to put in place the institutions and infrastructure that will make real estate investment feasible.
Particularly high on the list of investment infrastructure needs is the information infrastructure that will provide accurate indexes and measures of market performance.
Unfortunately, the objective historical data and market information needed to make rational real estate investment decisions is not always fully available.
The Mitsubishi Trust and Banking Corporation and Ikoma Data Service System Co., Ltd. are therefore pleased to announce the development of the MTB-IKOMA Real Estate Investment Index. We have pooled our expertise in the finance and real estate industries to create what we believe to be the most accurate index available at this time, an index that is able to meet the needs of serious investors.
We were grateful to be advised on our calculations and processing by MTEC (MTB Investment Technology Institute Co., Ltd.), a Mitsubishi Trust affiliate that specializes in investment theory research and spoke for the investorÂ's perspective in the development of the index.
The index uses a multiple linear regression analysis of approximately 12,000 tenant contracts to create a rent regression that allows us to provide a time series analysis of the rate of return on real estate investments since 1970. We will be updating the MTB-IKOMA Real Estate Investment Index every three months.
If you are contemplating an investment in Japanese real estate, we encourage you to use the MTB-IKOMA Real Estate Investment Index as part of your decision-making process. If you already own real estate in Japan, we encourage you to use the index for your zone to compare and evaluate the performance of your property.