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Translation - English Up until 2006 activity in the real estate market in Japan had been encouraged by the bull market for private placement funds.
However, markets in Japan have been feeling the aftermath of the subprime mortgage crisis which came to the forefront in the United States in 2007. One of the effects was for financing from foreign financial institutions to decrease sharply around September of last year. By the end of the year capital provided to the real estate sector from Japanese financial institutions had also nearly dried up.
Many private placement funds were founded based on the assumption that real estate prices would never fall and that there would always be someone there to provide capital, be it equity or debt. However, the flow of cash out of these funds finally started to slow down in the beginning of 2008.
Regardless of what happens to the real estate market, there are private placement funds that have to sell properties by a deadline in order to offer returns on equity. There are also some REITs (Real Estate Investment Trusts) that are in the situation of having to sell off their properties but being faced with buyers who are having problems finding financing. Because of this difficulty raising capital, REITs are forced to sell their properties off dirt cheap to the handful of blue-chip companies who are able to buy up the properties with cash on hand or to funds that can afford to purchase the properties with all equity deals.
There are reports that the subprime mortgage crisis is beginning to settle down. However, there will probably be some reluctance about lending to the damaged real estate sector of financial institutions for the near future. It could take quite a bit of time to get back to business as usual and for most of the market participants to get the loans they need.
Properties are being sold off with net operating income levels and capitalization rates that would have been unthinkable over a year ago. As mentioned in the supplemental materials, the TSE REIT Index has recovered to the level it was at three years ago, meaning that this could be a great chance to pick up property at bargain prices if funds are available.
Japanese to English translator specializing in finance and investor relations.
I have passed level 1 of the Japanese proficiency test and have a variety of both in-house and freelance translation experience.
I am a member of the JAT (Japan Association of Translators).
I have also passed the Shoken Gaimuin Shiken, which is the Japanese equivalent of the U. S. series 7 exam, so I am well aware of the terminology used in the financial field.
I look forward to hearing from you.
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