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A time when oil, stocks, gold, commodities and property, all going down at the same time, we are sure to see various businesses head to the gutters. Japan is no different with the real estate developers facing difficulties in maintaining expenses without any sales.
Recent figures give a very dark picture to those involved in the realty trade, with the commercial sector falling 0.9% and residential going down by 1.3%. A statement by Toshiro Nishioka, Managing Director at IPD Japan, made it clear that monthly indicators up to July 2008 are worsening for the commercial sector. He added 'In particular, offices in local cities have seen negative capital growth for the first time since December 2004. The annualised three-month total return for retail is lower than that for residential for the first time in our data history.’
The financial weakening of global economies is taking is taking its toll on developers and contractors as recent stats from the Japanese Real Estate Economic Institute claim there are now 203 developers compared to 547 in the mid 90s. Also, 425 Real Estate companies have close doors to operations in the first 9 months of this year, a staggering figure for the technology driven economy of Japan.
To add to the drubbing and growing investor concern, Akio Fukada, head of planning and research at the Institute says 'The current bankruptcies have only just begun. There will be more and more.'
Kajima, a Japanese contractor is winding-up from the UK after indulging into losses reaching £124m in three years. The company confirmed reports that its construction and civil engineering business have suffered tremendous losses including a housing project in Leeds along with a contract from the Health and Safety Executive in Merseyside. A spokesman said 'Apart from works required to meet the remaining obligations under existing contracts, the company's activities have now ceased in the UK.’
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