Category Archives: BUSINESS

Chikyoren opens pre-qualified register to private debt & equity

Source: ijapicap.com

The 21 trillion yen Pension Fund Association for Local Government Officials has added private debt and private equity categories to its manager pre-qualification register. Known as Chikyoren, it invests a large part of the reserves of 14 of mutual aid associations which cover a variety of public servants from teachers to the police.

The Fund is committed to following the same asset allocation as the Government Pension Investment Fund. This should, in turn, enable it to convert some of its “duty investments” in the debt of the Fiscal Investment & Loan Programme (FILP) and Japan Government Bonds (JGBs) into more productive holdings,

Real estate already features to its roster of alternatives managers but its actual property investments have been more overseas than at home.

To review the Fund’s commitment enter “Chickyoren’ in the search box at the top right.

© 2018 Japan Pensions Industry Database/Jo McBride. Reporting on, and analysis of, the secretive business of Japanese institutional investment takes big commitments of money and time. This blog is one of the products of such commitment. It may nonetheless be reproduced or used as a source without charge so long as (but only so long as) the use is credited to www.ijapicap.com and a link provided to the original text on that site.

This blog would not exist without the help and humour of Diane Stormont, 1959-2012

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International dispute sees Nagasaki property sit idle for a century

In Nagasaki’s former foreign settlement sits an overgrown lot filled with as many as 30 buildings, many of them abandoned and falling down. While vacant ‘akiya’ properties are not an unusual sight, this particular one is part of an ongoing international dispute between Russia and Ukraine over former Soviet property.

Back in 1875 the 1,500 sqm lot was purchased by the Russian Empire. In those days the port city of Nagasaki had a thriving and diverse international community of traders. Housing for employees of the Russian consulate was built on this hillside site. After the fall of the Russian Empire in 1917, the property sat idle. After WWII, locals who had lost their homes moved in, building small huts on the land. Those homes were then sold on or leased to third parties. This continued until 1987 when the former Soviet Union filed an ownership claim with the Nagasaki Regional Legal Affairs Bureau. This action was short-lived, after the collapse of the Soviet Union in 1991.

In 2000, Russia filed a suit in the Nagasaki District Court seeking the handover of the land from the people residing on it. In 2007, a settlement was reached with some of the residents that would see them receive ownership of the land in exchange for payment, while those that could not pay or were unreachable would be evicted. Worsening relations between Russia and Ukraine, saw these plans scuttled. To this day the land title has yet to be updated, still listing the Soviet Union as the owner.

Local residents have started to complain about the condition of the property to Nagasaki City, but nothing can be done without the permission of the landowner. It is located in the center of the city’s historic foreign settlement, and just down the hill from the Glover Garden – a …continue reading

    

Fukui Prefectural Governor’s residence may soon be for sale

Fukui Prefecture is planning to sell off the official prefectural governor’s residence. The 26-year old building is showing signs of age and deterioration, while running costs are increasing. The property has been vacant for over a year as the current governor decided to live in their own personal home.

The property includes the governor’s residence, vice governor’s residence, and secretarial division manager’s residence. The appraised value was 25 million Yen for the three buildings and 199 million Yen for the 5,500 sqm land, bringing the total to 224 million Yen (approx. US$2 million).

The governor’s residence was built in 1994 at a cost of 300 million Yen. The single-story wood-frame building has a total area of 540 sqm (5,810 sq.ft) of which 140 sqm is dedicated to living quarters, with the remaining 400 sqm used for meeting rooms and guest reception rooms.

Demolishing the existing buildings is estimated to cost around 68 million Yen, while repairing them to make them livable would cost around 28 million Yen and come with 6.5 million Yen in annual maintenance and running costs.

The prefecture will first see if Fukui City is interested in buying or using the property. If not, it will be made available for purchase through a public bidding process.

Location

Wakasugi 3 Chome, Fukui City, Fukui Prefecture

Source: The Fukui Shimbun, February 7, 2020.

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Measuring the economic and social impacts of high-speed rail

Measuring the economic and social impacts of high-speed rail

The scale of investments in high-speed rail (HSR) raises questions about the most appropriate methods of appraisal. Increasingly the reliance on conventional cost–benefit analysis, based essentially on the direct benefits to users and the direct costs to operators, has been questioned. While the focus has been for some time on the external costs and benefits of such projects, the reductions in accident and congestion costs, as well as the potential environmental effects, interest is increasing in the ways in which such projects may result in wider economic impacts. These arise from changes in accessibility and connectivity, which can impact the productivity of all firms through changes in agglomeration, rather than just impact those using a service. Such changes in productivity have an impact on a city or region’s economic performance, leading to a growth rate higher than expected. Differential effects on different cities or regions, depending on their ability to exploit new opportunities, can lead to either convergence or divergence and, hence, to the potential to rebalance regional performance in a national economy. This has been a stated aim of the development of the HSR network in the People’s Republic of China (PRC) and is also an objective of the proposed HS2 system in the United Kingdom (UK).

Identifying whether existing HSR projects have achieved such impacts is not, however, straightforward. Most analysis has focused on aggregate measures of performance, such as gross domestic product per capita, productivity, or economic growth, but changes may occur at a more micro level, affecting economic structure, relocation, or new firm creation.

Looking at simple measures of industrial specialization, European data suggest that HSR development contributed to convergence in economic structure both between major city regions and between the core cities and their hinterlands within each region. Evidence from the PRC indicates that there was an …continue reading

    

New apartment price in Tokyo reaches highest level in history

The average price of a brand-new apartment released for sale across greater Tokyo in January has jumped 47% from last year and has reached the highest level seen since record-keeping began in 1973.

According to the Real Estate Economic Institute, the average price of a new condo across greater Tokyo was 83,600,000 Yen, up 47.9% from last year. This has exceeded the previous record set during Japan’s asset price bubble in November 1990.

The average price per square meter was 1,262,000 Yen, up 55.2% from last year.

The average price in Tokyo’s 23 wards reached 105,110,000 Yen, a 38.7% increase from last year and the highest level seen since November 1992. The average price per square meter was 1,610,000 Yen, up 34.4% from last year. An overall shortage in supply across the region, and a few large releases in the expensive Toranomon and Shirokane neighborhoods helped pull up the average for the month. Over 40% of the new apartments that went on sale Tokyo’s 23 wards were priced over 100 million Yen.

A total of 1,245 new apartments were released for sale across greater Tokyo, down 34.5% from January 2018. The contract ratio was 63.0%, down 4.5 points from last year.

Source: The Real Estate Economic Institute, February 17, 2020.

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