Japan's Reits prefer share sales to bonds as property market turns bullish

Tokyo

JAPAN'S real estate investment trusts are raising more funds from shares, and avoiding a volatile bond market, as investors bet Abenomics will boost property prices.

Reits offered 222 billion yen (S$2.5 billion) of equity this year, already the busiest quarter since the final three months of 2013, Bloomberg-compiled data show. Note sales have dropped 39 per cent to 23 billion yen from a year ago, after 149.6 billion yen of issuance last year that was the most since 2010.

Tokyo office prices have risen to the highest since the third quarter of 2008 and Mizuho Securities Co expects a further increase as Prime Minister Shinzo Abe deepens economic stimulus. While 10-year Japanese government bonds (JGB) yielded 0.34 per cent on Monday, near the record low 0.195 per cent reached in January, price swings have jumped to the hi…