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Fukushima and investing in Japanese real estate.

Sunday, October 20, 2013

I have real estate investments in Japan through Saizen REIT. So, naturally, I am concerned about whether there is any progress made at the Fukushima nuclear power facility.

Prime Minister Shinzo Abe seems to be doing all the right things to kick start an economy that has been in deflation for 20 years. He has also openly asked for help from the international community to help manage the problematic Fukushima power plant. Is a solution close at hand?

Radioactivity levels at Japan's Fukushima nuclear power plant on Thursday were 6,500 times higher than the previous day's readings. 19 October 2013.

The situation does not seem to have improved.

Although Saizen REIT does not have buildings within a 20km radius of the power plant, the nearest being 60km away in Koriyama and 100km away in Sendai, the inability of Japan to handle the problem in an effective manner raises pertinent questions since earthquakes are likely to occur again. If nuclear plants in other parts of Japan should face the same problem in future, what then?

Having said this, if we believe that the Japanese economy is turning around and if we want to invest in Japanese residential real estate, it would make more sense to invest in a REIT than to invest in specific properties in Japan. This will lower the risk of a total loss due to natural calamities.

Related posts:
1. Saizen REIT: Sendai, Koriyama and Morioka.
2. Invest in Japanese real estate.
3. December 2011 in Japan: Hakone.


Kelvin said...

Hi Ak71,

How have you been? I know you wouldn't answer this question based on your style ^^ but I will nevertheless ask it, how about investing in Croesus retail trust which has exposure to the Japanese consumer?

AK71 said...

Hi Kelvin,

You are in for a treat. Click on #2 in "Related Posts" above and voila! ;p

The unit price of Croesus Retail Trust has declined quite a bit since I blogged about it then.

Anonymous said...

Whenever I read experts' views about Japan, they never fail to mention 1 challenge.

Demographics. About Japan's ageing population and how the economy will be saps of vibrancy if they do not do something about immigration or boast birth rates.

But that is a long term problem.

AK71 said...

Hi Mike,

Using immigration to compensate for declining birth rate. This is where Singapore got it right. I hope Japan does something in this direction. They don't really have a choice but to do this.

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