Japan's climate pledge prompts companies to sell ageing property
This is seen providing rare investment opportunities for potential buyers
Tokyo
JAPAN'S ambitious targets on carbon emissions is prompting some firms to offload ageing office blocks, resulting in rare investment opportunities for potential buyers, according to the head of the nation's biggest trust bank.
"Companies are now reviewing their facilities and assets and will either make them fit the carbon neutral policy or sell," said Toru Takakura, president of Sumitomo Mitsui Trust Holdings, which has about US$2 trillion of assets under custody.
"We are seeing properties that have been held by companies for years coming to the market and there are opportunities for good properties."
While firms assess the properties on how essential they are for their core businesses, potential buyers "may see various other uses or purposes in the locations", Mr Takakura said in an interview.
Japan in October pledged to become carbon neutral by 2050 and has outlined milestones for sectors such as energy, manufacturing and transportation.
A NEWSLETTER FOR YOU
Property Insights
Get an exclusive analysis of real estate and property news in Singapore and beyond.
The country's major businesses, meanwhile, are making moves to clean up their operations and are under pressure to demonstrate what steps they're taking to reduce emissions, no matter how big or small.
"Companies are considering how to cut emissions, including by retrofitting or rebuilding," Mr Takakura said. "But they are also likely to decide to sell them after considering whether holding such a property fits their strategy going forward."
Separately, Sumitomo Mitsui Trust, which offers real estate brokerage and domestic and international asset management services, is seeing a pick-up in property transactions after a sharp drop in early 2020 due to the coronavirus pandemic, Mr Takakura said.
Interest from foreign buyers is strong, particularly for distribution facilities and data centres, due to low global interest rates, he noted.
Investment in commercial real estate in Japan dropped 4 per cent last year, compared with 28 per cent globally, according to Jones Lang LaSalle.
Tokyo ranked third after Paris and London for investments in 2020, up from sixth a year earlier. BLOOMBERG
KEYWORDS IN THIS ARTICLE
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Property
Asking rents down as demand slows and rental listings surge
Chinese restaurants spur Hong Kong’s retail property recovery
Forrest Li’s wife buys Gallop Road bungalow next to the one he has redeveloped
Eurozone consumers increasingly struggle to pay for housing
Too many property agents? Cap commissions on home sales
URA releases reserve list site in Zion Road after developer commits to bid at least S$604.6 million