Japan rents tumble

PUBLISHED : Wednesday, 15 December, 1993, 12:00am
UPDATED : Wednesday, 15 December, 1993, 12:00am

IN Japan's real estate market, flats and offices that once rented for a king's ransom now beg for tenants, with ''to let'' signs on their often luxurious premises.

In Tokyo's upmarket residential Sendagaya district, a 15-unit building once filled with mainly European and American expatriates now has 10 units empty. The situation is hardly unique.

A 140-square-meter (1,500-square-foot) apartment in Tokyo that used to rent for US$9,200 a month four years ago can now be had for at least 20 per cent less as supply outstrips demand.

With the end of Japan's spectacular economic bull run, the price of real estate, which hit record levels in 1991, is falling fast.

A report by the government's land development agency said prices in the year following July 1992 plunged most sharply in Tokyo and Osaka - down about 12 per cent for residential land, and 21 per cent for commercial sites.

The research institute of the Long Term Credit Bank of Japan estimated that the vacancy rate for Tokyo office space would reach 12 per cent or more in 1995.

''The market is in full disarray. Nothing is selling and the percentage of unpaid rent is 25 per cent,'' said a representative of the Hirayama Kikaku company, which manages several Ginza buildings.