| TOKYO, Sept 19
TOKYO, Sept 19 Japan's land prices fell the
least since the global financial crisis in the year to July 1,
while commercial land in the three biggest cities rose in value
for the first time in the same period, the latest signs that
deflation is easing its stubborn grip on the country.
Land prices nationwide fell 1.9 percent, narrowing from the
previous year's 2.7 percent decline and the smallest drop since
2008, a government survey showed on Thursday.
This brings Japan closer to ending 22 years of falling land
prices - a legacy of the country's massive 1980s asset bubble.
The gradual narrowing of land-price declines is good news
for Prime Minister Shinzo Abe, whose top priority is ending
Japan's long battle with deflation and spurring sustained
But the land ministry data also show how uneven the
real-estate improvement has been, with rises limited to the best
properties in the choicest areas.
Commercial land prices in the greater Tokyo, Osaka and
Nagoya areas ticked up 0.6 percent, and residential land in
Nagoya - home of Toyota Motor Corp - rose 0.7 percent,
the first such increases since prices tumbled in the wake of
Lehman Brothers' collapse.
Even as real estate in most of Japan remains depressed, a
boom in investment in the hottest properties, driven by a search
for yield and hopes for "Abenomics," has recently shown signs of
Foreign investors have poured into upper-end Tokyo
properties and recently extended their purchases to major
Last month, a group including former U.S. insurance magnate
Maurice "Hank" Greenberg and an Abu Dhabi sovereign fund agreed
to buy a 31-year old office building in Tokyo for about $1
A building in Tokyo's posh Ginza district housing the
flagship store of jewelers Tiffany & Co, is up for sale
as owner Asia Pacific Land bets on a recovery in a property
But some market players doubt the sustainability of the
"I question whether or not actual fundamentals are driving
the recovery," said Robert Zulkoski, chairman and chief
executive of Laurasia Capital Management, a Singapore-based
"Is it just a reflection of all the liquidity that's in the
market trying to find investment yield?" he said to Reuters.
"It's very hard to analyze what's really going on in the market.
I am hopeful, but I am cautious."
Tokyo may continue to get a lift after winning the right to
host the 2020 Summer Olympics, given expectations that
redevelopment projects will buoy prices, some investors and
Mitsubishi Estate, a leading developer, said visits
to a showroom for its condominium project in Tokyo's Harumi
district, the planned site of the Olympic village, have almost
tripled since Tokyo was awarded the Olympics earlier this month.
At the high end of the market, Mitsubishi Estate said 22
units in a high-end condominium it is developing near the
Imperial Palace all sold out on the days they became available,
starting last week.
The project, with unit prices ranging from 160 million yen
($1.61 million) to 542 million yen, was five times
oversubscribed, the company said.
Amid continued declines in nationwide residential land
prices, Nagoya's upturn was driven by robust profits at Toyota,
a land ministry official said. The world's biggest car maker and
its related businesses are a dominant presence in that area of
Toyota last month posted a near-record quarterly profit
thanks to overseas sales that were helped by the falling yen.
The booming auto industry has encouraged
consumers in Nagoya to spend more, which has driven development
of commercial facilities and housing demand, the official said.
Tokyo's residential land prices edged down 0.1 percent, while
those in Osaka fell 0.4 percent.
The decline in nationwide prices for industrial land slowed
to 2.3 percent, buoyed by aggressive development by logistics
operators, said the ministry official.