TOKYO, July 23 Mitsubishi Estate Co's
credit rating has been lowered by one notch to A2 by Moody's
Investors Service, on concern that Japan's largest developer by
market value is less likely to reduce debt after announcing
plans to increase investment.
Mitsubishi Estate in May said it would spend as much as 900
billion yen ($8.9 billion) through 2016 to develop properties in
Japan including in Tokyo's Marunouchi district, which commands
the highest office rent in the country.
The announcement came at a time of recovery in the property
market. Land prices in Tokyo, Osaka and Nagoya - Japan's three
largest metropolitan areas - rose for the first time in six
years last year spurred by investment, according to a government
Improving market conditions prompted Moody's to apply a
stable outlook to Mitsubishi Estate's long-term senior unsecured
debt, the credit-rating firm said on Wednesday in a statement
detailing the rating cut.
The higher the credit rating, the easier and cheaper it is
for a company to borrow money.
Mitsubishi Estate is not alone in increasing investment in
an improving property market.
Mitsui Fudosan Co, Japan's second-largest property
developer, sold new shares last month to raise more than $3
billion for office development in Tokyo.
Privately held Mori Building Co also plans to spend about 1
trillion yen over the next 10 years on developments in Tokyo.
($1 = 101.4000 Japanese Yen)
(Reporting by Junko Fujita; Editing by Christopher Cushing)