Japan CMBS market picks up in H1, outstrips US-report
TOKYO, July 8 (Reuters) - Commercial mortgage-backed security issuance in Japan increased by 68 percent in the six months to June from the previous half-year, suggesting a recovery in the market which was severely hit by the global financial crisis, a brokerage report said.
Volumes reached $297.4 billion in the six months to June, almost 300 times bigger than the United States, where the market for all property-related securitisations has been decimated since retail mortgage-backed securities played a key role in causing the financial crisis.
In the United States, issuance stood at $1.07 billion in the first half -- a sharp contrast to 2007 when its total volumes ballooned to $234 billion, the Credit Suisse report dated July 7 showed.
Credit Suisse analyst Yoji Otani wrote in the report that Japan's bank lending and its CMBS market was relatively healthy because Japanese households and companies are not mired in debt, unlike their counterparts in the United States and Europe.
"The main source of finance in Japan's real estate market has traditionally been bank lending, with little reliance on securitisation, but Japan's CMBS market has also continued to function effectively," Otani wrote.
"In other words, we see relatively little risk of a contraction in the amount of leverage in Japan, which means there is substantial demand to purchase real estate at the right price," he said.
Total CMBS issuance in Japan in 2008 came to $540 billion, while volumes of only $12 billion were seen in the U.S., the report showed. (Reporting by Mariko Katsumura; Editing by Joseph Radford)
