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Thursday, January 20, 2011

Japan - REITs seen doubling down as bond spreads narrow

Japan’s real estate investment trusts may double property purchases in the next fiscal year to JPY 1trn (USD12bn) by boosting bond sales amid the lowest borrowing costs in three years, Credit Suisse said. The extra yield investors demand to lend to Japanese real estate firms instead of the government has fallen to 26 basis points, or 0.26% point, on 17 Jan this year from 230 in April 2009. The comparable premium for US REITS has narrowed to 199 basis points from 1,079 in the same period, according to Bank of America Merrill Lynch Global Bond Indices. (Bloomberg)

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