Orix May Slow Tokyo Property Buying on Subprime Rout (Update1)
By Kathleen Chu and Kazue Somiya
Feb. 26 (Bloomberg) — Orix Corp.s real estate unit will
invest more “selectively when adding to its 998 billion yen
($9.3 billion) of assets after the collapse of the U.S. subprime
market curbed credit, undermining property prices worldwide.
“The current market condition of the real estate investment
market has become somewhat worrisome, said Hiroaki Nishina,
president of Orix Real Estate Corp., in an interview. “Change
also means chance. We have the opportunity for selecting all
different types of properties that may be coming to the market.
International banks have booked $163 billion of losses and
writedowns following defaults on loans to homebuyers with poor
credit histories, crimping the ability of investors to borrow to
buy real estate. Growth in Japans property market may also slow
after housing starts fell for a sixth month in December because
stricter rules on building approvals delayed projects.
Shares of Orix, Japans largest non-bank financial company,
have fallen 17 percent this year, outpacing the 3.7 percent
decline for the 29 member Topix Other Financing Business Index.
Orixs real estate unit accounts for a quarter of the companys
total revenue. Orix gained 2.4 percent, or 380 yen, to 16,180 as
of 10:41 a.m. on the Tokyo Stock Exchange.
Nishina also reiterated Orixs plan to list an 80 billion
yen residential real estate investment trust by the end of the
year, after three rival initial public offerings were canceled
late last year.
Orix expects its 40 percent stake in Daikyo Inc., one of
Japans biggest condominium builders, to help the residential
REIT listing, Nishina said.
To contact the reporter on this story:
Kathleen Chu in Tokyo at
