Mori Buildings, one of Japan's largest and most successful real-estate groups, is planning to launch a real-estate investment fund with Nomura Securities, Japan's largest broker, aimed at Japanese investors. The fund, which marks a new strategy for both companies, is expected to amount to about 200 billion yen (about HK$14.6 billion), although the final details are still being discussed. 'We have not yet reached a final decision, but we are planning this fund,' a Nomura official said. The launch of the fund is striking because domestic investors have largely shunned the real-estate market since the collapse of the 1980s property bubble. Consequently, the new fund provides one hint that some financial companies hope the mood may be slowly changing. It comes as Mori is also hoping to launch some investment projects with foreign financial groups. It has not yet concluded any deal, and stresses that a range of structures or candidates is possible. However, the concept has attracted interest among some foreign investors because many companies such as Goldman Sachs and GE Capital are scrambling to find ways to develop investment opportunities in the country's property market. 'I have lots of overseas investors calling me,' said Mori president Minoru Mori. 'Until now, I have been telling them that the time is not quite right, but now I am telling them that the time is right.' The moves by Mori have been partly triggered by the problems property companies face in raising finance from Japanese banks. 'In the bubble era the banks would lend you as much money as you wanted against land but now they feel that having land makes you a risk, so the banks are very nervous about lending,' Mr Mori said. 'That is why we are thinking of tying hands with a foreign investor.' But the steps have also reflected growing hopes among some Japanese real-estate companies and foreign investors that parts of the property market may be recovering. These hopes appear to be at odds with the official data on real-estate prices from the National Land Agency, which showed that prices declined by 2.7 per cent in the year to June, the eighth consecutive year of fall. This was a faster pace of decline than in the previous year, when prices fell 1.4 per cent. However, Mr Mori said the NLA data overstated the decline since it focused on old, bubble-era parts of the economy. He said there was a growing divergence between parts of the market. 'Generally, there is a normalisation of prices now - the worst is over. Good, useful properties are going up in prices, but unattractive ones are going down,' Mr Mori said. JAPAN
