Of Interest

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Friday, October 29, 2010

Worldwide Corruption Rankings index 178 countries

Since 1995, Transparency International has published an annual Corruption Perceptions Index  ordering the countries of the world according to "the degree to which corruption is perceived to exist among public officials and politicians". The organization defines corruption as "the abuse of entrusted power for private gain".


Governments committing huge sums to tackle the world's most pressing problems, from the instability of financial markets to climate change and poverty, corruption remains an obstacle to achieving much needed progress. The 2010 Corruption Perceptions Index shows that nearly three quarters of the 178 countries in the index score below five, on a scale from 10 (highly clean) to 0 (highly corrupt). These results indicate a serious corruption problem.

To address these challenges, governments need to integrate anti-corruption measures in all spheres, from their responses to the financial crisis and climate change to commitments by the international community to eradicate poverty. Transparency International advocates stricter implementation of the UN Convention against Corruption, the only global initiative that provides a framework for putting an end to corruption. Denmark, New Zealand and Singapore are tied at the top of the list with a score of 9.3, followed closely by Finland and Sweden at 9.2. Bringing up the rear is Somalia with a score of 1.1, slightly trailing Myanmar and Afghanistan at 1.4 and Iraq at 1.5.

Notable among decliners over the past year are some of the countries most affected by a financial crisis precipitated by transparency and integrity deficits. Among those improving in the past year, the general absence of OECD states underlines the fact that all nations need to bolster their good governance mechanisms. The message is clear: across the globe, transparency and accountability are critical to restoring trust and turning back the tide of corruption. Without them, global policy solutions to many global crises are at risk.

Wednesday, October 27, 2010

Toranomon-Roppongi Building

Toranomon-Roppongi Area

Vertical Garden City

Construction is currently underway for the Vertical Garden City redevelopment of a large slice of central Tokyo close to ARK Hills. Working in concert with local residents, Mori Building will transform these areas into safer, more comfortable and greener places to live.























About the Project
Concept.

This redevelopment project covers approximately 2.0 hectares of land located extremely close to Kamiyacho Station on the Tokyo Subway Hibiya Line and Roppongi 1-chome Station on the Namboku Line.

Many embassies and hotels are located nearby, making it an area with a strong international flavor, and it is being developed through category 1 urban redevelopment projects such as ARK Hills, Izumi Garden, etc. Moreover the "Loop Road No. 2, vicinity of Shimbashi, Akasaka, and Roppongi" area, which includes the site of this development, has been designated an urgent urban renewal area.

Based on the concept of "a life surrounded by nature in the heart of the city," we are aiming to build an appealing urban area that is very cosmopolitan and has abundant culture. It will combine residential, retail, and business functions to a high standard. The development will be in harmony with other developments in the vicinity, ensure reasonable and sound land use, improve disaster prevention capability, and advance the development of the city infrastructure.

Development of public facilities is to include widening of the ward road on the western side of the site by 12 meters from the opposite bank, and the building of two new ward roads, 9 meters and 6 meters wide, around the perimeter of the site. We will also develop public spaces inside the site itself, an approximately 3,000m2 space on the west side and an approximately 1,000m2 space on the south side, and develop new pedestrian walkways and green areas. There is a height difference of approximately 10 meters between the existing residential areas on the west side and east side of the development site, but this project will help to improve the convenience of the area by installing escalators and elevators in the walkways.

Overview of Plan

Location Roppongi 1-chome and Toranomon 5-chome, Minato-ku, Tokyo
Size of site (C-1 Area) Approximately 15,370m2
(C-2 Area) Approximately 510m2
Total floor area Approximately 143,720m2
Floors Mixed-use tower: Above ground: 47 / Basement levels: 4
Residential building: Above ground: 6 / Basement levels: 2
Major uses Offices, shops, residences
Construction to be started Autumn 2009
Construction to be completed 2012

Janek Gwizdala Project Live

All the players on this recording are monster.  Oli rockberger rips it on Ivories, Janek shreds it on Bass - they're all awesome. The composition is constantly fresh. It's like a more jazz-oriented Maceo Parker, but still with a lot of funk influences.The Bass lines have fantastic harmonies, and the band is very tight. One of my favorite contemporary Jazz Trios!
Janek Gwizdala Bass, Oli rockberger Keyboard, Tobias Ralph - Drums.



Janek is one of the highest level bass players alive today but mostly a great composer, a true musician and arranger.

Monday, October 25, 2010

Latitudes not Attitudes: How Geography Explains History

Latitudes not Attitudes: How Geography Explains History

Many reasons have been given for the West’s dominance over the last 500 years. But, Ian Morris argues, its rise to global hegemony was largely due to geographical good fortune.
I am wearing your clothes, I speak your language, I watch your films and today is whatever date it is because you say so.
This is what Shad Faruki, a Malaysian lawyer, told the British journalist Martin Jacques in a 1994 interview. And he was right: for 200 years, a few nations clustered around the shores of the North Atlantic – ‘the West’, as we normally call them – have dominated the world in ways without parallel in history.
Most people, at some point or another, have wondered why the West rules. There are theories beyond number. Perhaps, say some, westerners are just biologically superior to everyone else. Or maybe western culture is uniquely dynamic; or possibly the West has had better leaders; or the West’s democratic politics and its Christianity might give it an edge. Some think western domination has been locked in since time immemorial: others that it is merely a recent accident. And, with many westerners now looking to China’s double-digit economic growth to pull the world out of recession, some historians even suggest that western rule has been an aberration, a brief interruption of an older, Sinocentric, world order.
When experts disagree so deeply, it usually means that we need fresh perspectives on a problem. Most of those who pronounce on Western rule – economists, political pundits, sociologists – tend to focus on recent times and then make sweeping claims about the past. Asking why the West rules, though, really requires us to work the other way round, posing questions about history, then seeing where they lead. As the masthead of this magazine puts it: ‘What happened then matters now.’

The shape of history

Explaining why the West rules calls for a different kind of history than usual, one stepping back from the details to see broader patterns, playing out over millennia on a global scale. When we do this the first thing we see is the biological unity of humanity, which flatly disproves racist theories of western rule.
Our kind, Homo sapiens, evolved in Africa between 200,000 and 70,000 years ago and has spread across the world in the last 60,000 years. By around 30,000 years ago, older versions of humanity, such as the Neanderthals, were extinct and by 10,000 years ago a single kind of human – us – had colonised virtually every niche on the planet. This dispersal allowed humanity’s genes to diverge again, but most of the consequences (such as the colour of skin, eyes, or hair) are, literally, only skin deep and those mutations that do go deeper (such as head shape or lactose tolerance) have little obvious connection to why the West rules. A proper answer to this question must start from the fact that wherever we go – East, West, North, or South – people are all much the same.
So why have their histories turned out so differently? Many historians suggest that there is something unique about western culture. Just look, they say, at the philosophy of Socrates, the wisdom of the Bible, or the glories of Leonardo da Vinci; since antiquity, the West has simply outshone the rest. Such cultural comparisons, however, are notoriously subjective. Socrates, for instance, was certainly a great thinker; but the years in which he was active, during the fifth century bc, were also the age of the Hebrew prophets in Israel, of the Buddha and the founders of Jainism in India, of Confucius and the first Daoists in China. All these sages wrestled with much the same questions as Socrates (Can I know reality? What is the good life? How do we perfect society?) and the thoughts of each became ‘the classics’, timeless masterpieces that have defined the meanings of life for millions of people ever since.
So strong are the similarities between the Greco-Roman, Jewish, Indian and Chinese classics, in fact, that scholars often call the first millennium bc the ‘Axial Age’, in the sense of it being an axis around which the whole history of Eurasian thought turned. From the Mediterranean to the Yellow Sea, larger, more complex societies were facing similar challenges in the first millennium bc and finding similar answers. Socrates was part of a huge pattern, not a unique giant who sent the West down a superior path.
From a global perspective, Christianity, too, makes more sense as a local version of a broader trend than as something setting the West apart from the rest. As the Roman Empire disintegrated in the middle of the first millennium ad and new questions (Is there something beyond this life? How can I be saved?) gained urgency, the new faith won perhaps 40 million converts; but in those same years, in the wake of the Han dynasty’s collapse in China, Mahayana and Theravada Buddhism offered their own answers to the same questions and won their own 40 million devotees. Soon enough Islam repeated the feat in Africa, the Middle East and South Asia.
Even such astonishing Renaissance men as Leonardo and Michelangelo, who refined the wisdom of the ancient West to revolutionise everything from aeronautics to art, are best seen as Europe’s versions of a new kind of intellectual which societies needed as they emerged from the Middle Ages. China had produced its own Renaissance men some 400 years earlier, who also refined ancient wisdom (in their case, of course, the East’s) to revolutionise everything. Shen Kua (1031-95 ad), for instance, published groundbreaking work on agriculture, archaeology, cartography, climate change, the classics, ethnography, geology, maths, medicine, metallurgy, meteorology, music, painting and zoology. Even Leonardo would have been impressed.
Over and over again, the triumphs of western culture turn out to have been local versions of broader trends, not lonely beacons in a general darkness and, if we think about culture in a broader, more anthropological sense, the West’s history again seems to be one example of a larger pattern rather than a unique story. For most of their existence, humans lived in small, egalitarian hunter-gatherer bands. After the Ice Age some hunter-gatherers settled down in villages, where they domesticated plants and animals; some villages grew into cities, with ruling elites; some cities became states and then empires and, finally, industrialised nations. No society has ever leaped from hunting and gathering to high technology (except under the influence of outsiders). Humans are all much the same, wherever we find them; and, because of this, human societies have all followed much the same sequence of cultural development. There is nothing special about the West.

Location, location, location

You may have noticed that all the historical examples I have mentioned – Italy, Greece, Israel, India, China – lie in a narrow band of latitudes, roughly 20-35° north, stretching across the Old World. This is no accident: in fact, it is a crucial clue as to why the West rules. Humans may all be much the same, wherever we find them, but the places we find them in are not. Geography is unfair and can make all the difference in the world.
When temperatures rose at the end of the last Ice Age, nearly 12,000 years ago, global warming had massive consequences everywhere, but, as in our own times, it impacted on some places more than on others. In the latitudes between 20° and 35° north in the Old World and a similar band between 15° south and 20° north in the Americas, large-grained wild grasses like wheat, rice and teosinte (the ancestor of maize) and large, relatively tame mammals like wild goats, pigs and llamas went forth and multiplied in the warmer weather. This was a boon for humans, who ate them, but in the process of managing these other species – cultivating and tending the plants, herding and culling the animals – humans unintentionally domesticated them. We unwittingly altered their genomes so much that they became new species, providing us with far more food. Genetically modified organisms had been born. Potentially domesticable plants and animals existed outside the lucky latitudes, but they were less common. Indeed many places, such as large parts of Western Europe, sub-Saharan Africa and Australia, had no domesticable native species at all. The consequence, given that humans were all much the same, was predictable: the domestication of plants and animals – farming – began in the lucky latitudes long before it began outside them. This was not because people in the lucky latitudes were cleverer or harder-working; nature had just given them more to work with than people in other places and so the task advanced more quickly.
Nor was nature even-handed within the lucky latitudes. Some places, above all the so-called ‘Hilly Flanks’, which curve from what is now Israel through Syria, southern Turkey, northern Iraq and western Iran, were extraordinarily well endowed; China between the Yellow and Yangzi rivers and the Indus Valley in Pakistan were somewhat less so; Oaxaca in Mexico and the Andes in Peru somewhat less still. Consequently, the Hilly Flanks were the first to see farming firmly established (by 7500 bc); then came China and Pakistan (around 5500 bc); then Oaxaca and Peru (by 5000 bc); and then, over the next 7,000 years, most of the rest of humanity.
Farming spread from its original cores because it could support more people than hunting and gathering. The lives farmers led were often harder and their diets poorer than hunters’, but that was beside the point. The farmers’ weight of numbers, nastier germs (bred by crowding and proximity to domestic animals), more efficient organisation (required to keep order in larger villages) and superior weapons (necessary to settle constant quarrels) steadily dispossessed the hunters, who either took up farming in their own right or ran away.
The agricultural cores developed increasingly complex institutions as they expanded. Within 3-4,000 years of the start of farming (that is, by 3500 bc in Southwest Asia, 2500 bc in the Indus Valley, 1900 bc in China, 1500 bc in Mesoamerica and 1000 bc in the Andes) the first cities and states were taking shape. Within another few centuries, most had bureaucrats keeping written records and by 2,000 years ago a continuous band of empires, with populations in the tens of millions, stretched from the Mediterranean to China. By then imperialists and traders had exported agriculture, cities and writing beyond the lucky latitudes as far afield as cold, rainy Britain in the northwest and hot, humid Cambodia in the southeast. These great empires – the Han in the East, the Mauryan in India, the Parthian in Iran and Iraq and the Roman further west – had many similarities; but the biggest, richest and grandest by far was Rome, the descendant of Eurasia’s original, westernmost agricultural core in the Hilly Flanks.
Geography explains why farming first appeared towards the western end of the Old World’s lucky latitudes; and, if the West had simply held on to the early lead that nature’s unfairness had given it, geography would be the obvious explanation for why the West now dominates the world.
But that is not what actually happened. The West has not always been the richest, most powerful and most sophisticated part of the world during the last ten millennia. For more than 1,000 years, from at least 600 to 1700 ad, these superlatives applied to China, not the West.
After the fall of the Roman and Han empires in the early-to-mid first millennium ad, China was reunited into a single empire while the West remained divided between smaller states and invading Arabs. By 700, China’s capital at Chang’an had probably a million residents and Chinese literature was enjoying a golden age. Woodblock printing presses churned out millions of books, paid for with the world’s first paper money (invented in the 10th century). By 1000 an economic revolution had joined the cultural explosion: 11th-century China produced almost as much iron each year as the whole of Europe would be doing in 1700, on the eve of its Industrial Revolution. Chinese ironmasters produced so much, in fact, that they clear-cut entire forests to feed their forges, and – six centuries ahead of the West – learned to smelt their ores with coke.
For centuries, Chinese wealth and power dwarfed the West’s. Between 1405 and 1433, while little Portuguese caravels tentatively nosed down Africa’s west coast, Chinese emperors dispatched gigantic fleets across the Indian Ocean under the leadership of the eunuch admiral Zheng He (who, according to legend, was nearly three metres tall and 230 cm around the belly). Zheng’s flagship was on the same scale as its skipper. At 80 metres long, it was the largest wooden ship ever built. When Columbus set sail in 1492, his own flagship was shorter than Zheng’s mainmast and barely twice as long as the big man’s rudder. Columbus led three ships and 90 sailors; Zheng led 300 ships and 27,870 sailors. His fleet extracted tribute from the cities of India, visited Mecca and even reached Kenya, where today Chinese archaeologists are diving to locate wrecks of Zheng’s ships.

The power of place

The glories of medieval China seem, on the face of it, to disprove any geographical explanation for why the West now rules. After all, geography has not changed very much in the last 500 years.
Or maybe it has. Geography shapes history, but not in straightforward ways. Geography does determine why societies in some parts of the world develop so much faster than others; but, at the same time, the level to which societies have developed determines what geography means.
Take, once again, the example of Britain, sticking out from Eurasia into the cold Atlantic Ocean. Four thousand years ago, Britain was far from the centres of action in the Nile, Indus and Yellow River valleys, where farming had been established for millennia, great cities had grown up and labourers by the thousand broke their backs to immortalise divine kings with pyramids and palaces. Distant Britain had few of these things, which spread only slowly from the Mediterranean core to the Atlantic periphery. Geography made Britain backward.
But, if we fast-forward to 400 years ago, the same geography that had once made Britain backward now gave the island nation wealth and power. Britain had been drawn into a vastly expanded and more developed core, which now had ships that could reliably cross oceans and guns that could shoot the people on the other side. Sticking out into the Atlantic, such a huge disadvantage 4,000 years ago, became a huge plus from the 17th century.
The first sailors to the Americas were Italians (Christopher Columbus was from Genoa; the famous ‘British’ explorer John Cabot, who reached Newfoundland in 1497, actually grew up as Giovanni Caboto, in Florence). They were soon shoved aside by the Portuguese, Spanish, British, French and Dutch – not because the Atlantic littoral produced bolder or smarter adventurers than the Mediterranean, but simply because Western Europe was closer to America.
Given time, the 15th century’s greatest sailors – the Chinese – would surely have discovered and colonised America too (in 2009 the Princess Taiping, a replica of a 15th-century junk, came within 20 miles of completing a Taiwan–San Francisco round trip, only to collide with a freight ship within sight of home). But in much the same way that geography had made it easier for people in the Hilly Flanks to domesticate plants and animals than for people in other parts of the world, it now again stacked the odds in the West’s favour. The trip from England to New England was only half as far as that from China to California. For thousands of years this geographical fact had been unimportant, since there were no ocean-going ships. But by 1600 it had become the decisive fact. The meaning of geography had changed.
This was just the beginning of the changes. In the 17th century a new kind of economy took shape, centred around the North Atlantic, generating massive profits and driving up wages in north-west Europe by exploiting the geographical differences round its shores. In the process, it enormously increased the rewards for anyone who could explain how the winds and tides worked, or measure and count in better ways, or make sense of the secrets of physics, chemistry and biology. Not surprisingly, Europeans began thinking about the world in new ways, setting off a scientific revolution; they then applied its insights to the societies they lived in, in what we now call the Enlightenment. Newton and Descartes were geniuses, but so too were Chinese scholars like Gu Yanwu (1613-82) and Dai Zhen (1724-77), who also spent lifetimes studying nature. It was just that geography thrust new questions on Newton and Descartes.
Westerners answered their new questions, only to find that the answers led to still newer questions. By 1800 the combination of science and the Atlantic economy created incentives and opportunities for entrepreneurs to mechanise production and tap into the power of fossil fuels. This began in Britain, where geography conspired to make these things easier than anywhere else; and the energy windfall provided by fossil fuel quickly translated into a population explosion, rising living standards and massive military power. All barriers crumbled. British warships forced China to open to western trade in 1842; Americans did the same in Japan 11 years later. The age of western rule had arrived.

The lessons of history

So what do we learn from all this history? Two main things, I think. First, since people are all much the same, it is our shared biology which explains humanity’s great upward leaps in wealth, productivity and power across the last 10,000 years; and, second, that it is geography which explains why one part of world – the nations we conventionally call ‘the West’ – now dominates the rest.
Geography determined that when the world warmed up at the end of the Ice Age a band of lucky latitudes stretching across Eurasia from the Mediterranean to China developed agriculture earlier than other parts of the world and then went on to be the first to invent cities, states and empires. But as social development increased, it changed what geography meant and the centres of power and wealth shifted around within these lucky latitudes. Until about ad 500 the Western end of Eurasia hung on to its early lead, but after the fall of the Roman Empire and Han dynasty the centre of gravity moved eastward to China, where it stayed for more than a millennium. Only around 1700 did it shift westward again, largely due to inventions – guns, compasses, ocean-going ships – which were originally pioneered in the East but which, thanks to geography, proved more useful in the West. Westerners then created an Atlantic economy which raised profound new questions about how the world worked, pushing westerners into a Scientific Revolution, an Enlightenment and the Industrial Revolution. By the mid-19th century, the West dominated the globe.
But history did not end there. The same laws of geography continued operating. By 1900 the British-dominated global economy had drawn in the vast resources of North America, converting the USA from a rather backward periphery into a new global core. The process continued in the 20th century, as the American-dominated global economy drew in the resources of Asia, turning first Japan, then the ‘Asian Tigers’ and eventually China and India into major players.
Extrapolating from these historical patterns, we can make some predictions. If the processes of change continue across the 21st century at the same rate as in the 20th century, the economies of the East will overtake those of the West by 2100. But if the rate of change keeps accelerating – as it has done constantly since the 15th century – we can expect eastern global dominance as soon as 2050.

An age of rapid change

It all seems very clear – except for one niggling detail. The past shows that, while geography shapes the development of societies, development also shapes what geography means; and all the signs are that in the 21st century the meanings of geography are changing faster than ever. Geography is, we might even say, losing meaning. The world is shrinking and the greatest challenges we face – nuclear weapons, climate change, mass migration, epidemics, food and water supply – are all global problems. Perhaps the real lesson of history is that by the time the East overtakes the West, the question of why the West rules may have ceased to matter very much.

Easy does it

Symbolic moves by the Bank of Japan 
 
JAPAN’S economy has long been sickly. It now also has to contend with a stronger yen, thanks in part to loose monetary policy elsewhere in the rich world. That alone gave the Bank of Japan (BoJ) reason to act on October 5th. So too did criticism that it has not done enough to spur the economy, which has inspired Japanese politicians to suggest legislation to weaken the central bank’s independence.
Whatever its motivation, the BoJ this week took three modest but symbolic steps. First, it lowered its policy rate from 0.1% to a range between zero and 0.1%. That signals to the market, and to disenchanted politicians, that the BoJ cares. Second, the BoJ stated that it would maintain its virtual zero-rate policy until there was “medium- to long-term price stability”. Until deflationary Japan sees consumer prices rise by between 0% and 2% a year (with an unofficial aim of 1%), the long-standing near-zero policy rate will remain.
Third, the central bank said that it would consider establishing a programme to buy public- and private-sector assets from banks—including commercial paper, corporate bonds and perhaps even exchange-traded funds and Japan real-estate investment trusts. Since the financial crisis Japan has continued to accept financial instruments as collateral in order to pump money into the system, but has not bought the assets. The effect would be to restart the policy of quantitative easing that Japan used to claw out of its banking crisis between 2001 and 2006. The initial amount under consideration is about ¥5 trillion ($60 billion), ¥3.5 trillion of which is for public-sector debt. That is on top of a sum of ¥30 trillion already budgeted for BoJ loans to banks.
The market had expected some form of easing but had not imagined a whittling of interest rates, however symbolic. The Nikkei 225 Stock Average hit a two-month high on October 6th and bonds rose sharply. From a political standpoint, too, the moves were a success. The finance minister, Yoshihiko Noda, said he expected the actions to weaken the yen and improve the economy. “Very timely,” gushed Banri Kaieda, the economics minister.
Whether the BoJ’s actions will have any lasting impact on the economy is another matter. The change in the policy rate does not mean much in practice: it merely reinforces the message that low rates are here to stay for a while. The asset-purchase programme is as yet too small to matter. An expected round of fresh quantitative easing by America’s Federal Reserve later this year will put more upward pressure on the yen, which on October 7th reached a 15-year high against the dollar, about where it was before last month’s currency intervention. Still, the BoJ seems willing to respond to a worsening economic climate and to political heat. The psychological boost that represents should not be discounted.

Global Real Estate prices

Global Real Estate prices

Floor to ceiling

Our latest round-up shows that prices are on the rise in most markets

THIS time last year global real estate prices were a sea of negative numbers. That was then. Of the 20 markets tracked in the last year, only four still posted year-on-year declines and only Ireland’s property catastrophe has worsened. (America’s FHFA index, which excludes real estate that was financed with large mortgages, was also down, but the country’s Case-Shiller national and ten-city indices rose modestly.)
Asia’s price rises lead the way, as they did when the data were last published in July. Singapore, Hong Kong and Australia boast the gaudiest year-on-year price increases, even if the rate of appreciation is down a bit from the summer. Real Estate prices in China rose by 9.1% in the year to September, compared with a 12.4% rise in May. That is still too fast for the government, which unexpectedly raised interest rates on October 19th and has outlined more measures to cool the market in recent weeks, including higher down-payment requirements and the introduction of a property tax in some cities.
My analysis of “fair value” in real estate, which is based on comparing the current ratio of real estate prices to rents with its long-run average, suggests that China has less to worry about than the likes of Australia, which is again the most overvalued of the markets we track. That makes it all the more surprising that Australia’s central bank opted not to increase its benchmark interest rate this month.
Europe shows a familiar split between core countries and peripheral ones. Ireland, Spain and Italy continue to suffer year-on-year price declines; German and French homes have shown big gains in value over the past year, a particular turnaround for France since our previous round-up. The British housing sector’s talent for defying gravity may be on the wane. The pace of annual appreciation in the country’s property market has slowed over the summer. British housing is still overvalued—outright falls may loom.
check out this interactive Real Estate-price tool that compares global real estate data, now including price-to-rent ratios
America’s real estate market, almost alone among those which experienced a big bubble, is more or less fairly valued at this point, at least according to price-to-rent ratios. But price rises may not last for long. Earlier gains were driven by substantial reward programmes and government subsidies, many of which have now lapsed. America’s overhang of housing inventory may get worse if concerns over lenders’ foreclosure processes jam up sales. The temptation for the country’s 11m underwater borrowers to walk away is another threat (see Economics Focus). And being at or below fair value is no guarantee of a bounce in prices: Japanese housing fell by 4% in the year to the end of the first quarter, despite being stuck far below its long-run price-to-rents ratio.

Wednesday, October 20, 2010

I Think I'm Turning Japanese

I Think I'm Turning Japanese

There is no subtler, surer means of overturning society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction and does it in a way that not one man in a million is able to diagnose.

A fall from grace
At one point in the late 1980s, there was a square block of real estate in downtown Tokyo, near the Imperial Palace, that was worth more than all of California.
The country was booming...
The Japanese led the world in electronics. Every teenager had to own a Sony Walkman. The Toyota Supra and four wheel drive pickup were the two bests car of the decade.
Japanese investors bought up American icons like Rockefeller Center, Columbia Pictures, and the Pebble Beach Golf Course.
Along the way, Japan also created the 100-year mortgage and had an unassailable cadre of elites that ran the banks, the government, and the corporations. The country was run by one political party — the Liberal Democratic Party — from 1955 to 2009.
Stimulating death
This political party's main platform was "spend money and create growth."
It tried stimulus after stimulus... They've built bridges in mountainous villages where few people live... They've forced banks to take on massive debt, and shuffled other debt to different banks.
And after twenty years of spending, Japan has $9.7 trillion in public debt — twice its GDP in 2009. They still have no growth.
A few months ago, in the thick of the Greece debt crisis, the Prime Minister warned the Japanese Parliament, “It is difficult to sustain a policy that relies too heavily on issuing debt. As we have seen with the financial confusion in the European Community stemming from Greece, our finances could collapse if trust in national bonds is lost and growing national debt is left alone.”
Death spiral
Japan has been in a deflationary spiral for 20 years.
The nation's housing bust has still not hit bottom.
People hold onto money because they know what they want to buy will be cheaper later.
Core consumer prices fell 1.0 percent in August, marking 18 consecutive months of decline.
And to top it off, they just aren't making any more Japanese. Check out the population pyramid:
 japanpopBD

As you can see during the “Economic Miracle” period from 1950 to 1990, Japan was youthful, ambitious, and full of vigor.
Despite what economists would have you believe, it still takes people to make stuff.
Right now, the birth rate in Japan is 1.34 — well below the replacement level.
Furthermore, Japanese culture isn't accommodating to foreign immigration. The fact is that Japan's workforce is shrinking at the same time its population of retirees is growing.
And to add to our Japan bashing, I give you the Nikkei 225 Index:

ni225

After hitting 40,000 in 1990, the NI225 has been one dead cat bounce after another. It's looking like it might bottom around 5,000.
The Bank of Japan forecast its economy would grow 2.6 percent in the fiscal year to March 2011, and 1.9 percent the following year.
The yet the yen goes up
With everything seemingly going against Japan, why is it that their currency is going through the roof?
Below is the U.S. dollar/Japanese yen conversion chart.
I like to flip currency charts over in my mind to get a good idea of them. The drop means that you can buy more dollars with your yen. In other words, the yen has gone up 13 points in three months. (Note the doji at the bottom of the trend.)
dollar-yen
That's a huge deal in currency markets, and Japanese exporters like Toyota don't like it — the higher yen makes exports expensive.
President of Toyota Motors Akio Toyoda recently said, “Toyota Motor Corp (TM) is not considering hastily shifting production overseas despite the yen’s strengthening against the dollar.”
The automaker went on to say, “Theoretically speaking, Toyota cannot afford to compete with its rivals.”
This was a clear shot at the government to do something about the yen...
A large group of legislators from the Democratic Party of Japan said the central bank "should carry out drastic monetary easing."
Taking the hint, the government is starting to act. Japan's central bank has launched a 5 trillion yen (or USD$60 billion) effort to buy a wide range of debt — including government bonds, corporate IOUs, and real estate investment trust funds, among others. This is just the first step in Japan's quantitative easing.
It is obvious that Japan has taken the worst hit as the rest of the world goes into a currency war. Japan understands this, and will attempt to reverse the cycle by destroying its own currency and creating inflation.
The obvious trade here is to short the yen.

In other words, if the yen goes down, your investment goes up twice as much.
If this is too confusing, think of it this way: The entire world — with the exception of China — is hell-bent on destroying their own currencies in an effort to inflate away debt and increase exports.
This means that things that have inherent value will go up, especially in dollar terms.

Tuesday, October 19, 2010

Japan M&A Boom Will Lead Country Out of Deflation, Says Freeze

Japan M&A Boom Will Lead Country Out of Deflation, Says Freeze
Japanese mergers and acquisitions are set to increase and will help steer the country out of deflation, said Curtis Freeze, chairman of Honolulu-based Prospect Asset Management Inc.

There will be at least 100 transactions with a value of $1 billion for both inbound and outbound deals in the next few years, said Freeze, who is also chief executive officer of Gro- BeLS Co., a Tokyo-based real-estate firm. That will create opportunities for investors in the world’s third-largest economy, he said at the Hedge Funds Asia Summit hosted by Bloomberg Link in Hong Kong today.

“Japan’s best day is yet to come,” Freeze said. “There is going to be more activity” as Japanese companies look to buy firms at home and Asian companies look to access capacities of Japanese firms, creating opportunities for investors, he said.

“Japan is the world’s most cash-rich country,” Freeze said. “And that’s exciting.”

The value of takeovers and asset sales involving Japanese companies worldwide has reached $93 billion this year, according to data compiled by Bloomberg. That compares with $128 billion in 2009 and $153 billion in 2008, the data show.

The Bank of Japan earlier this month pledged to keep its benchmark interest rate at “virtually zero” until deflation has ended and created a 5-trillion yen ($61 billion) asset- purchase fund to buy government debt and assets including exchange-traded funds and real-estate investment trusts.

Japan’s gross domestic product may shrink for the first time in more than a year in the three months ended Dec. 31, according to a survey by the government-affiliated Economic Planning Association. The economy grew at a 1.5 percent pace in the second quarter, half the pace of the first quarter of 2010.

The catalyst for Japan defeating deflation will be “change in control” amongst Japanese firms rather than government policies, Freeze said. As aging owners of Japanese firms are replaced, their successors will look for new business strategies, Freeze said.

Saturday, October 16, 2010

Leon Ware ;Carleen Anderson & Michael Franti - "Inside My Love"

Leon Ware & Carleen Anderson - Inside My Love (Live in Amsterdam, 2001)

"Inside My Love" written by...Minnie Ripperton, Richard Rudolph and Leon Ware(along with several other tunes) in 1975 and it's featured on Minnie's "Adventures In Paradise".
Here is a more recent version of "Inside my Love" with the J.Dilla touch and Production and a brilliant hip hop Rap fusion scratch mix ending by Michael Franti who is so in the groove and kool his contribution works soooo well it rocks it.
Carleen Anderson,s voice is so beautiful...no mistake leon chose her to perform with him...michael franti catches the BIG vibe too...like i said, perfect...wish i could have been there.
Minnie would've been So proud!!!!

MPS Jazzin' The Black Forest

In the film's ninety minutes there are many memorable passages, but one of the most enlightening is archival footage of Oscar Peterson and his trio arriving at Brunner-Schwer's house after a concert performance. What started as a brief bit of fun turned into a lengthy house concert, and while it's not all captured on film, one can sense Peterson's comfort in the environment and appreciate just how much that sense of comfort contributed to the creative process. There's also some exciting, albeit brief, concert footage of Mangelsdorff with Jaco Pastorius and Alphonse Mouzon that would ultimately result in the album Trilogue - Live! (MPS, 1976).
 
 Albert Mangelsdorff, Alphonse Mouzon, Jaco Pastorius




Friday, October 15, 2010

Investors Eye Tokyo Property Sale


Bloomberg News
Tokyo in view: A forthcoming commercial property sale is attracting interest from elsewhere in Asia.
Japan’s once-storied real estate sector has gone from bubbly to bad, to even worse in recent years. But an upcoming commercial property sale in Tokyo, which is seen as a litmus test for the market, is drawing a new kind of investor: Asian money.
Japan Tobacco Inc., the world’s third-largest tobacco maker, is in process of selling three mixed-use buildings in Tokyo, which could fetch up to 100 billion yen, according to market observers. The site is called Shinagawa Seaside Forest and was once home to a JT plant. JT is selling three of its office buildings in the site, and the tobacco maker will sell all three as a package or each building separately, depending on demand.
This is the first big commercial real estate deal Tokyo has seen since the collapse of Lehman Brothers. It is being closely watched by industry observers and bankers, to see if the property market is showing a sign of the recovery.
Japanese real estate’s supply-demand balance has eroded since the financial crisis, and the nation’s land prices have plummeted for nearly a decade.
But what makes this deal really different is that Asian investors are showing a keen interest in the sale. In the past, most foreign real estate investment flowing into Japan came from Western private equity funds or investment banks.
“There is a possibility that money from a pension fund or a sovereign fund from Asia, such as Taiwan, Korea, Hong Kong, Singapore or mainland China, will be poured into the Japanese market,” said Takashi Hashimoto, an analyst at Barclays Capital analyst, citing Asian appetite for the JT deal.
A JT spokesman said bidding is scheduled to take place on November 25, and the company expects an agreement will be reached in January

Distress is a Global Phenomenon with Few Solutions

Distress is a Global Phenomenon with Few Solutions

Oct 14, 2010 2:44 PM, By David Bodamer
Ever since the commercial real estate market turned south in early 2007, investors have speculated about when this cycle’s distressed real estate opportunities would materialize. That conversation has not been limited to the United States. And it turns out that investors in Europe and Asia have largely seen the same process play out there as has happened here; distressed real estate exists, but banks are working at a glacial pace in resolving problems.
A panel at the ULI Fall Meeting took up this discussion. The session, “Global Deals on Distressed Assets”, was moderated by Stephen Blank, senior resident fellow, finance, with ULI, and featured Robert Peto, president, the Royal Institution of Chartered Surveyors, and Simon Terry, group CEO of Australian private equity real estate investment advisory firm MGPA.
New York City-based research firm Real Capital Analytics pins the current amount of total distressed commercial real estate in the U.S. at about $290 billion. Peto, for his part, pinned the level of distress at a similar level in Europe, where there is about 1.4 trillion euros in commercial real estate debt outstanding and about 150 billion euros in distress. According to Terry, the picture in Asia is a bit murkier given the lack of transparency in China’s real estate market, while in Japan there is about $170 billion in commercial real estate debt coming due in the next few years.
To date, however, banks have largely sat on that debt. Phenomenon like “extend and pretend,” where banks have opted to roll over troubled loans rather than recognize losses, has led to less opportunity than many investors imagined. In the U.S., about $90 billion in distressed debt has been dealt with. In Europe, Peto estimates that the total amount of outstanding commercial real estate has shrunk by as little as 20 billion euros since the market’s peak. “Almost nothing has been taken out,” he said. “There’s been no meaningful pay down.”
What’s enabled the situation to play out like this has been the fact that governments across the world have largely opted to save the banks. That, in turn, has enabled them to delay dealing with bad debt, according to Blank. Banks don’t have to mark their loans to market. That’s significant because a large percentage of commercial real estate that was financed at the market’s peak is now worth less than the mortgages arranged on the assets. If banks had to mark-to-market, the panel said, they wouldn’t have enough equity to cover the resultant losses.
Instead, banks are able to borrow money at near 0 percent interest rates. That money, in turn, is generating profits through trading desks or by buying government debt, such as Treasuries. This process is enabling banks to recapitalize and—the idea goes—enter into a position to resolve distressed situations as they build buffers of capital.
But Blank pointed to another factor delaying the resolution of distressed assets. He said that banks missed out on the upside after the Resolution Trust Corporation (RTC) bailout in the late 1980s. At the time, the government-created institution absorbed assets from liquidated savings and loans and other bad debt and then auctioned off assets. The buyers of those assets profited as assets recovered in the next real estate cycle. So banks are trying to hold on and wait for real estate values to recover so they don’t miss out on profits this time around.
As Peto put it, “Nobody is willing to put assets on the market. Banks can’t take hits to satisfy your need for cheap property.”
Another problem the panel identified was the fact that the market doesn’t understand what properties are truly worth. Peto talked about how even the concept of “distressed” assets is a bit of a misnomer. “A distressed sale is one where you are forced to the market and have to move the property in a short amount of time,” he said. If you have six months to prepare, market it and complete the sale, “then it’s not a distressed price, it’s the actual market price.”
Ultimately, none of the speakers saw the logjam of distressed assets getting resolved any time soon. Unless banks are forced to act, they will continue to dribble out properties and spread the pain as long as possible. In short, that “tsunami of distress” everyone talked about a few years ago is never going to materialize.

Wednesday, October 13, 2010

Tokyo and nine regional cities

Tokyo and nine regional cities

Presented here are overviews of Tokyo and nine major cities, including land price changes over the long-term and snapshots of major macroeconomic indices. For details of each city, click the red dots on the map below left.
(1) Land Prices
(2) Rental Office Market
(3) Population
(4) Retail and Household Income
(5) External Resources
(1) Land Prices - Recovery from the bubble burst
After the collapse of the bubble economy, the Japanese economy entered a period of stagnation called the "lost ten years." Looking at the fluctuations of the price change rates in commercial districts (sites for offices and retail stores), it is apparent that the three major metropolitan areas had particularly significant rises and falls from the late 1980s to the early 1990s in comparison to the national average. This tendency is particularly prominent in the Tokyo and Osaka regions.
Annual changes of standard land prices in commercial districts of metropolitan areas

Source: The Ministry of Land, Infrastructure, Transport and Tourism
During the bubble economy, surplus funds held in Japan due to the appreciation of the yen were directed to land investment. It was a time when the "land-price myth," which asserts that land prices will never go down, was widely believed. After the collapse of the bubble economy, few buyers showed interest in real estate properties for which prices kept falling. The recovery of land prices started only after drastic liquidation of bad loans by financial institutions. This process was helped by the general adoption of the DCF method, which enabled objective appraisal of real estate and the securitization of properties by the Asset Liquidation Law, which came into effect in 1998. The market was led by foreign-based funds such as Morgan Stanley and the recovery of the macro economy supported land prices.
Standard land prices for commercial districts

Source: The Ministry of Land, Infrastructure, Transport and Tourism, 2007
Data shown in the above graph is based on the land prices for roughly 30,000 locations assessed by real estate appraisers appointed by the government every July. The survey is conducted for the purpose of taxation and there is some divergence from the actual transaction prices over the short-term.
Looking at the standard land prices of commercial districts, for which national averages reversed their declines in 2007, Fukuoka recorded the highest at 769,000 yen per m2 among the nine major cities, except Tokyo. It is followed by a similar value of 767,000 yen per m2 in Osaka. These are about one third of the price appraised in the wards of Tokyo, which was 2,036,000 yen per m2.
The standard land prices in commercial districts over previous years in Nagoya, Kyoto and the wards of Tokyo started to rise from 2005, while all of the nine cities reversed their declines from 2006 to 2007. In particular, Sapporo, Kyoto, Osaka, Fukuoka and the wards of Tokyo recorded increases of more than 10% two years in a row. The growth of land prices are saturating though, particularly in Nagoya and Kyoto.
Annual changes of standard land prices in commercial districts

Source: The Ministry of Land, Infrastructure, Transport and Tourism, 2007
(2) Rental Office Market - Vacancy rate records the lowest in Tokyo
Among the nine cities, Yokohama recorded the highest asking rent for offices, roughly 12,000 yen per tsubo, while Kyoto and Kobe recorded asking rents at the 11,000 yen per tsubo level, followed by the 10,000 yen per tsubo level of Osaka, Nagoya and Fukuoka (Tsubo equals to 3.3m2, or 36 ft2). Sapporo and Sendai dipped below the 10,000 yen per tsubo level. Standards in the five central wards of Tokyo (Chiyoda, Chuo, Minato, Shinjuku and Shibuya) are close to reaching the 16,000 yen per tsubo level and the standard of Osaka was about two thirds of that.
Asking rents of office buildings

Source: CBRE Research Institute, December 2007
The vacancy rate as of the end of 2007 was lowest in Yokohama at 4.2%, which was followed by rates at the 5% level in Osaka and the 6% level in Nagoya and Kyoto. While the actual standard rent of Kobe exceeds that of Osaka by roughly 1,000 yen per tsubo, the vacancy rate in Kobe is higher than 10%. The vacancy rate for the major five wards of Tokyo remains at the low level of 1.7 %.
The vacancy rates in the nine cities peaked in 2003 and have been declining since then in general. The vacancy rates in Yokohama and Nagoya drifted without exceeding 10% in 2003, the year which saw vacancy rates increase nationwide. Although the vacancy rates in the two cities had a downward tendency after 2004, they went up slightly in 2007. Meanwhile, the vacancy rates in Kyoto and Osaka, which exceeded 10% from 2002 to 2003, rapidly decreased and recovered to the 5% to 6% level in and after 2006. Although Sapporo and Sendai once exhibited a downward trend, they have remained at roughly the same level for the past year or two.
Changes in vacancy rates of office buildings

Source: CBRE Research Institute, December
(3) Population - Centralization progress while Japan shrinks as a whole
As of June 2008, Yokohama has a population of roughly 3.64 million, which is the largest among the nine cities. It is followed by Osaka with a population of roughly 2.65 million and Nagoya with a population of roughly 2.24 million. The smallest among the nine cities is Naha, which has a population of roughly 310,000.
When compared with the wards of Tokyo, the population of Yokohama is equivalent to roughly 42% of that of the wards of Tokyo, while the populations of Osaka and Nagoya are roughly 30% and 26% respectively.
Estimated populations

Source: published data of each municipal office, 2008
Looking at the changes in the population growth rates for every five years, cities in major metropolitan areas showed significant decreases in population as demonstrated by Nagoya, Osaka, Kobe, Naha and the wards of Tokyo, all of which recorded negative growth in a comparison between 1990 and 1995. The major reverse in growth between 1990 and 1995 in Kobe is due to the Great Hanshin-Awaji Earthquake.
Changes in population growth rates

Source: Ministry of Internal Affairs and Communication, Statistics Bureau
In a comparison between 1995 and 2000, however, Nagoya, Kobe and the wards of Tokyo reversed their negative trends as their growth rates moved upward. In addition, all of the nine cities and the wards of Tokyo recorded increases in the 2000 and 2005 comparison. An apparent trend of centralization became common among the major cities, though population of the country is declining as a whole.
The highest growth rate in the 2000 and 2005 comparison was the 4.5% recorded by Yokohama and Fukuoka, which was followed by the 3.8% of Naha and the 3.2% of Sapporo. The wards of Tokyo remained at 4.4%, roughly at the same level as Yokohama and Fukuoka. Osaka, which had a population that had been in continuous retreat, reversed its negative growth increasing by 1.2%.
(4) Retail and Household Income
In a comparison of the number and total retail space of large-scale retail stores with floor space exceeding 1,000 m2 in the nine cities, the largest number of stores is 361 in Osaka, followed by 336 in Yokohama and 335 in Sapporo. As for total retail space, Yokohama has the largest amount of space, exceeding 2.26 million m2.
The number of large-scale retail stores in Kyoto, which has a population roughly the same size as Kobe and Fukuoka, is only 138 and the total retail space is also small at roughly 750,000 m2.
The wards of Tokyo have 911 retail stores and the total retail space exceeds 4.69 million m2. In a comparison between Yokohama and the wards of Tokyo, the number of retail stores in Yokohama is roughly one third of the wards of Tokyo, while the total retail space in Yokohama is roughly half that of the wards of Tokyo.
The number and the total retail space of large stores

Source: Toyo Keizai, 2007. Stores with retail space in excess of 1,000 m2
Sales turnover of large-scale retail stores (department stores and supermarkets) was the largest in Osaka among the nine cities, surpassing 1 trillion yen. It was followed by the roughly 930 billion yen in Yokohama and the roughly 800 billion yen in Nagoya. The total of the wards of Tokyo reached 2.85 trillion yen and the turnover of Osaka is equivalent to roughly one third of that.
In comparison to the previous year, each city remained at approximately the same level and there is little difference between cities. Sapporo, Nagoya and Kyoto slightly increased their totals over the previous year.
Sales turnover and the comparison with the previous year

Source: Ministry of Economy, Trade and Industry, 2006. Department stores with retail space of more than 3,000 m2. Supermarkets more than 1,500 m2.
As for the annual income of households consisting of two or more persons in each city, Yokohama recorded the highest annual income of 7.68 million yen, followed by 7 million yen in Fukuoka and 6.66 million yen in Nagoya. The lowest was the 4.25 million yen of Naha. The standard of Yokohama was roughly the same as that of the wards of Tokyo.
Comparison of household income

Source: the Ministry of Internal Affairs and Communication, Statistics Bureau, 2006. Households of two or more persons
(5) External Resources
For investors who wish to learn about Japanese property market from the ground, a comprehensive handbook published by the Real Estate Companies Association of Japan may be helpful. “REAL ESTATE in Japan” is issued annually in English and offered online for free.
REAL ESTATE in Japan

Those who want to check recent updates of rents and vacancy data may try “Office Market Report” published by CB Richard Ellis Research Institute. It is a quarterly report that covers metropolitan and regional cities. Note that the rents CBRE reports are asking rents, instead of actual closing rents which we offer proprietarily on the Closing Rent Survey page.
Office Market Report

The Association for Real Estate Securitization (ARES) provides online J-REITs information, by compiling public information regularly. "J-REIT View" abounds with outline of each REIT and statistic data, such as share price and dividend yields, updated weekly. "J-REIT Property Database" is comprised of indices and a database of REIT owned properties, based on the disclosed information. ARES also offers "Japanese Real Estate Market Overview", a webpage of its survey on cap rates, construction stats, etc.
The Association for Real Estate Securitization

The Japanese Real Estate Investor Survey, conducted semi-annually by a leading real estate appraisal institution Japan Real Estate Institute (JREI), provides expected cap rates of buildings in the Tokyo's central business districts, as well as regional cities. The report represents aggregated-base information of viewpoints and expectations, and does not reflect the actual transaction. However, it often referred as a key indicator for capturing market trends. The PDF files include English translation printed side by side with Japanese text.
The Japanese Real Estate Investor Survey

"Land Price Look Report" is the most recent effort of the Ministry of Land, Infrastructure, Transport and Tourism(MLIT) to improve transparency of the market. It represents an aggregation of the report on the quarterly trends in land prices of urban centers by local real estate appraisers. Quarterly changes are expressed by up and down allows on the map.
Land Price Look Report

160 large-scale office building development projects currently in progress in Tokyo.

 The map of Tokyo below represents 160 large-scale office building development projects currently in progress in Tokyo. The survey was conducted on buildings with more than 10,000 m2 of floor space that will mainly be used for offices in the 23 wards of Tokyo in April 2010, regardless of whether they would be used by their owners or leased to tenants. A total of 126 office buildings with a total floor space of at least 10,000 m2 are to be completed in Tokyo's 23 wards in or after 2010 for an aggregate total floor space of 7.6 million m2.
Click on the map to expand.
























A total of 31 buildings with a total floor space of 1.1 million m2 will be completed in 2010. Thereafter, more buildings will be completed in 2011 and 2012, with more than 1.8 million m2 of floor space being supplied in 2012.

Construction plans for an additional 38 buildings were added to the data in the latest survey. Of those buildings, 25 will be completed by 2011. As was the case in the survey carried out one year ago, the construction of single buildings, which require shorter construction periods, was more active. Meanwhile, the buildings being completed in and after 2012 will mostly be large buildings with more than 100,000 m2 of total floor space. In our latest survey, plans for an additional six buildings came to light as parts of redevelopment projects.
Click on to expand




















































Click on to expand picture.

Tokyo Class A Buildings Rents Hitting Bottom Soon.

ASIA PACIFIC CONTINUES TO LEAD
GLOBAL OFFICE RENT REBOUND
EMEA region follows closely, with rents turning up.

More than half of the office rental markets in Asia Pacific either stabilized or moved into the growth phase during the second quarter (Q2) of 2010, demonstrating that the region continues to lead the global real estate recovery, according to CB Richard Ellis’ (CBRE) latest quarterly Global Office Rental Cycle report.



















According to the rent estimates for model buildings envisioned by the institute for each major area, rents for the Marunouchi and Otemachi areas have already fallen to a level equal to that marked at the time of the "2003 problem," when there was an excess supply of office buildings.
In particular, the rent drop for Class A buildings in central Tokyo is significantly noticeable and the difference in rent compared with smaller buildings and buildings in the surrounding areas is rapidly diminishing.
The latest report points out the possibility of rapid growth in demand for Class A buildings, which now seem to be undervalued after rent adjustments, since there has always been strong demand from tenants for Class A buildings in central Tokyo.
Nevertheless, despite the fact that the rent for Class A buildings in such areas is nearing the bottom, the report did not revise the forecast that rents for large office buildings in broader Tokyo will not bottom out until 2011, as an overall recovery of office space demand is considered to take more time.
The report states that rents for small to medium-sized buildings and buildings in the areas surrounding central Tokyo may fall in an increasingly stronger downward trend for the time being.
Tokyo,Japan The Long Road to Recovery
Vacancy peak still to come, rental revenue to hit bottom in 2011.

Sunday, October 10, 2010

Best 20 Deals -In Review 2009

Best 20 Commercial Real Estate transactions in Japan, based on proprietary data made in 2009. The Big Bertha being the Pacific Century Place Marunouchi Deal was the biggest (Hit for 6), not far behind was the AIG Otemachi Building. As big acquisition deals go, such as the Shiodome Building (#5), the Resona Maruha Building (#8) and the TOA headquarters (#13) resume in the end of the year, the real estate market is showing some signs of recovery with foreign funds on the hunt many are acquiring or ready to pull the trigger.


Pacific Century Place Marunouchi (Photo: Tsuyoshi Tamai)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

#1 SECURED Acquires Pacific Century Place Marunouchi for 140 Bil.

SECURED CAPITAL JAPAN announced on December 15 that it will be acquiring the office portion of Pacific Century Place Marunouchi. The acquisition price has not been revealed but it is estimated to be about 140 billion yen ($1.6 billion). This is the largest real estate transaction of 2009 in Japan.













AIG Otemachi Building 1

#2 AIG Sells Otemachi Building for 115 Bil.

On May 11, AIG announced that it will sell the AIG Otemachi Building in Tokyo for approximately 115.5 billion yen (US $1.2 billion). The buyer is NIPPON LIFE INSURANCE. "The sale generated substantial interest from both Japanese and foreign investors, resulting in a very competitive bidding process," Edward Liddy, AIG’s Chairman and Chief Executive Officer said.
Conceptual drawing of the building to be developed (Courtesy of NTT Urban Development) 1

#3 NTT URBAN Obtains Leasehold for Land for 86 Bil.

On March 10, the Tokyo Metropolitan Bureau of Sewerage selected the NTT URBAN DEVELOPMENT group as the developer of an office and commercial building. The building will be developed above the Shibaura Water Reclamation Center in Shinagawa-ku, Tokyo.
Asahi Seimei Otemachi Building 1

#4 ASAHI LIFE Sells HQ to MITSUBISHI for 80 Bil.

In March 2009, ASAHI MUTUAL LIFE INSURANCE sold the Asahi Seimei Otemachi Building in Otemachi, Chiyoda-ku, Tokyo. The buyer is a special purpose company belonging to MITSUBISHI ESTATE and the price is slightly less than 80 billion yen (US $790 million).
Shiodome Building 1

#5 JRE Acquires 30% of Shiodome Building for 54 Bil.

JAPAN REAL ESTATE (JRE), a REIT, announced that it will acquire 30% quasi joint ownership of trust beneficiary interests in the Shiodome Building, located in Kaigan, Minato-ku, Tokyo. The acquisition price is 54.6 billion yen ($590 million) and will be delivered in January 2010. JRE already acquired a 10% ownership interest in the Shiodome Building in December 2008. Through this acquisition, it will own a 40% interest.
Nakameguro Center Building 1

#6 HULIC Selling System Center for 46 Bil.

In April 2009, HULIC, a real estate company affiliated with MIZUHO FINANCIAL GROUP, announced that it will sell an information system center in Naka-Meguro, Tokyo. The property will be sold to its tenant, MIZUHO BANK.
 4

#7 ACCOMMODATIONS FUND to Acquire 43 Bil. 

Apartment Portfolio

NIPPON ACCOMMODATIONS FUND, a REIT of MITSUI FUDOSAN, announced that it will acquire 18 rental apartment buildings in Tokyo and local core cities. The total acquisition cost is 42.6 billion yen ($460 million) and this transaction by NIPPON ACCOMMODATIONS will be the first large-scale acquisition by a REIT in quite some time.
Resona Maruha Building (Photo: Tsuyoshi Tamai) 1

#8 MITSUBISHI Acquires Otemachi Building for 42 Bil. 

Otemachi Development TMK, a special purpose company which MITSUBISHI ESTATE and other firms are shareholders in, decided in December 2009 to acquire 27% of compartmentalized ownership in the Resona Maruha Building, an office building located in Otemachi, Chiyoda-ku, Tokyo, from TOKYU REIT. The acquisition price is 42 billion yen ($470 million) and the property will be handed over in January 2010.

#9 DAIMARU Acquires Store in Osaka for 38 Bil.

On February 26, department store DAIMARU announced that it would acquire its rival’s flagship, the Sogo Shinsaibashi store in Osaka City for 37.91 billion yen (US $410 million). The store will be closed at the end of August and reopen as DAIMARU in November.
KDX Toyosu Grandsquare 1

#10 KENEDIX Sells Building to CARLYLE for 34 Bil.

On June 30, major asset management firm KENEDIX announced its sale of KDX Toyosu Grandsquare, a large office building in Shinonome, Koto-ku, Tokyo. The buyer is a fund managed by the CARLYLE GROUP. The price was slightly less than 35 billion yen ($350 million).


Orinas Tower

#11 JPR REIT Acquires Olinas Tower for 31 Bil. 

In June 2009, JAPAN PRIME REALTY (JPR), a REIT sponsored by listed developer TOKYO TATEMONO, added Olinas Tower to its operating assets. The office building in Sumida-ku, Tokyo, was obtained for 31.3 billion yen (US $320 million) from the sponsor and several other owners.
Shinsaibashi Urban Building 1

#12 KANSAI URBAN BANKING Selling Headquarters for 24 Bil.

On September 24, KANSAI URBAN BANKING CORPORATION announced that it would sell its headquarters building in Chuo-ku, Osaka City. The large office and retail building near the busy Shinsaibashi intersection will be sold to KEIHANSHIN REAL ESTATE for 24.4 billion yen ($250 million).
TOA Headquarters Building 1

#13 Kojimachi Dev Site Sold for 23 Bil.  a 39% Decline in Price

NIPPON TELEVISION NETWORK decided to acquire the building site of the TOA headquarters in Yonbancho, Chiyoda-ku, Tokyo, for 23.15 billion yen ($260 million). The seller is a special purpose company of real estate company SHOEI. The handover of the ownership is scheduled for March 2010.
LAZONA Kawasaki Plaza 1

#14 TOSHIBA Selling Parking Lot in Kawasaki for 22 Bil.

In March 2009, TOSHIBA decided to sell a 9,765 m2 parking lot adjacent to LAZONA Kawasaki Plaza, a large-scale commercial facility in front of JR Kawasaki Station. The buyer of the hourly parking lot is NREG TOSHIBA BUILDING, which is a consolidated subsidiary of NOMURA REAL ESTATE HOLDINGS.

#15 NOMURA REIT Reshuffles assets

In January 2009, NOMURA REAL ESTATE OFFICE FUND, a REIT, announced that it would acquire four office buildings in Tokyo including the Nomura Ueno Building. At the same time, it announced that it would sell three properties in Osaka, Sapporo and Hiroshima.
Orix Real Estate Nishi-Shinjuku Building 1

#16 ORIX JREIT Invests 18 Bil. Yen, Reshuffles Assets

In March 2009, ORIX JREIT acquired the ORIX Nishi-Shinjuku Building located in Shinjuku-ku, Tokyo and the Omiya Miyacho Building located in Saitama City. Both properties were acquired from ORIX REAL ESTATE and the total acquisition price was 18 billion yen (US $180 million).
Nihon Jisho Daiichi Building 1

#17 Mizuho Affiliate HULIC Acquires Building for 13 Bil.

In September 2009, HULIC, a real estate company affiliated with the MIZUHO FINANCIAL GROUP, acquired a rental office building in Kudankita, Chiyoda-ku, Tokyo. The Price is 13.5 billion yen ($140 million). The seller is a fund established by SIMPLEX INVESTMENT ADVISORS, an affiliate of GOLDMAN SACHS and AETOS CPITAL.
Lietocourt Arx Tower 1

#18 Kuwait-backed ST MARTINS Acquires Apartment for 13 Bil.

In February 2009, U.K.-based ST MARTINS PROPERTY acquired a large-scale rental apartment building offering 281 residential units in the Tsukiji area of Tokyo. The acquisition price was 13 billion yen (US $130 million) and the seller of the property was DAVINCI ADVISORS.
Sumitomo Shoji Nishikicho Building 1

#19 TOP REIT Acquires Kanda Building for 13 Bil.

TOP REIT decided to acquire the Sumitomo Shoji Nishikicho Building in Kanda-nishikicho, Chiyoda-ku, Tokyo. The price is 12.7 billion yen ($140 million) and the seller is major trading company SUMITOMO CORPORATION.
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#20 PROLOGIS Builds Logistics Facility for 11 Bil.  in Misato

Prologis announced its plan to sell ProLogis Park Misato II to an affiliate of GIC, the Government of Singapore Investment Corporation, for 12.5 billion yen ($138 million). The contract is scheduled to close in April 2009.>>