REFILE-Tokyo office rents seen set to bounce in H1 2010
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TOKYO Dec 16 (Reuters) - Rents for first-class offices in Tokyo will likely bottom out in the first half of 2010 and foreign investors have already begun hunting investment opportunities in the city's property market, a report said.
The average rent for Tokyo's grade A offices fell 35 percent by September from the recent peak in March 2008 and nearing levels seen in 2003 and 2004, property adviser Jones Lang LaSalle (JLL.N) said.
Looking ahead, however, the city's premier office rents are likely to bounce higher in the first half of 2010 after falling to within 10 to 20 percent of the bottom seen in 2004, thanks to limited supply, the report said.
A recovery in the office market would also likely lift investor sentiment as well as banks' willingness to lend, the report said.
"Foreign investors had been sitting on the sidelines in 2009 because of a falling rents and higher yields. But investors, especially those managing foreign pension funds, have begun mulling re-entry given signs of improvement in the market," Jones Lang LaSalle said.
"We believe we will witness a return of those investors to the country's property market in early 2010" it said. (Reporting by Mariko Katsumura; Editing by Michael Watson)