Real Estate Developers Rushing To Meet Growing Investor Demand

Wednesday, July 27, 2005
Real Estate Developers Rushing To Meet Growing Investor Demand

TOKYO (Nikkei)--Midsize real estate developers are accelerating their efforts to grab larger shares of the growing market for wealthy individual investors and real estate investment trusts (REITs).
Dix Kuroki Co. seeks to boost sales of condominiums in fiscal 2005 by 40% from the preceding quarter. Those condos will be marketed to investors.
The Fukuoka-based developer aims to sell 1,400 units in 30 buildings during the current fiscal year. About 40% will be sold to individual investors and 60% to investment funds.
Although most of the condos are being built in Fukuoka and Tokyo, the company will open its first sites in Osaka this fiscal year and in Nagoya the following year.
Zephyr Co., which also develops condos, is expanding to include such commercial facilities as a shopping mall. It has begun a 20 billion yen project to build a large shopping mall in Kashiwa, Chiba Prefecture. The shopping center will be sold to funds after its scheduled completion next spring.
Driving those efforts is the fact that large supermarket chains are launching stores using funds obtained from REITs.
Building a commercial facility involves larger investments and returns than developing a condo and is therefore more attractive to Zephyr.
Since last year, a flurry of REITs and privately offered investment funds have been established. There also has also been a noticeable trend in which wealthy individuals are buying entire condo buildings.

(The Nikkei Financial Daily Wednesday edition)