Japan: Immo-Verbriefungen stiegen um 150 % auf 7 Trillionen Yen

Sunday, August 17, 2003

Real Estate Securitization Jumps 150% To Y7tln In 2 Years

TOKYO (Nikkei)--Securitization of real estate under management of Japan's five major trust banks has surged almost 150% in the past two years to about 7 trillion yen as more companies now sell land and other properties through the method to raise funds to construct condominiums and office buildings, The Nihon Keizai Shimbun has learned.

Most aggressive among the five trust banks in helping corporate clients raise funds through securitization is Mizuho Trust & Banking Co., which expects the amount of securitized assets under its management to reach 2 trillion yen by the end of August -- a record high for trust banks.

Securitization was previously used mainly by companies to sell real estate in order to reduce assets as a way to improve their balance sheets. This business-restructuring-oriented move accounted for about 80% of all real estate securitization business managed by Mizuho Trust in fiscal 2000.

The ratio dropped to 45% in fiscal 2002, when almost 50% of the bank's securitization business came from companies that sold landholdings to raise funds to build mainly condominiums on the sites.

The trust banking unit of Mizuho Financial Group Inc. (8411) has seen the amount of securitized real estate under its management rise 400 billion yen since April this year and expects the total to reach 2.3 trillion yen by March next year, according to bank officials.

Helping to organize this development-type securitization of real estate will often lead to "new business opportunities related to the building construction projects," in the words of a Mizuho Trust official.

(The Nihon Keizai Shimbun Monday morning edition)