Tokyo borrowers play negative rates game in office property boon
BOJ's decision to expand purchases of Reits expected to prompt investors to put more money into property
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Tokyo
CREDIT Suisse Group AG is predicting prices for prime Tokyo office space may rise 10 per cent this year as a Japanese real estate investment trust refinanced bank debt in an agreement that means it will get paid to borrow.
GLP J-REIT said in a statement last week it agreed to swap floating rates for a fixed cost with Nomura Securities Co on about 5.3 billion yen (S$65 million) of debt. The Reit will receive about 480,000 yen a year net for borrowing the funds, a rate of minus 0.009 per cent, the statement shows. Credit Suisse said higher-rated property companies "could well obtain negative interest rate terms" when refinancing debt through such transactions as well.
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