Deutsche Bank To Relaunch Property Lending In Japan

by MartiMoe7099779907 posted Apr 25, 2018


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By Junko Fujita

TOKYO, Oct 26 (Reuters) - Deutsche Bank AG is relaunching its real estate lending business in Japan, after scaling it down post the 2008 financial crisis, as it looks to tap into the nation's tourism boom that could grow even bigger if casinos are built. The bank, which also underwrites, sells and trades stocks and bonds in Japan, was one of the most active arrangers for commercial mortgage-backed securities in Japan at the top of the property bubble before the global market crash nine years ago.

Japan's property market has rebounded since late 2012, when Prime Minister Shinzo Abe took office and launched an aggressive monetary easing plan, dubbed Abenomics, to reflate the economy.

The market is now led by strong demand for accommodations from the growing number of foreign tourists, a trend that is expected to continue. Last year, Japan welcomed a record 24 million tourists, up 22 percent from a year ago.

"Deutsche Bank is taking a view that there are opportunities in Japan and we have allocated capital to this business," Geoff Crum, head of real estate at the German bank's global credit trading in Tokyo, told Reuters in an interview.

"We are definitely bullish on the continued strength of the tourism market."

Opportunities for real estate lending could grow further if casino gambling is fully legalized in Japan, he said, as funding demand for the integrated resorts - facilities hosting casinos, hotels and conference space - will be huge.

Japan's parliament last year passed a law to legalize casinos, but it needs fresh legislation to allow their construction.

Las Vegas Sands Corp and MGM Resorts International , which are vying to win licenses to run a casino resort in Japan, have previously said they would plough up to $10 billion respectively into a project.

"Even at relatively low leverage rate, that's a huge amount of debt capital," said Crum.

Deutsche also sees opportunities in lending for hotel investors, as there will be more demand for hotels in regional cities driven by demand from foreign repeat tourists.

"We have been seeing an increasing number of our clients looking at more regional locations as investment destinations in terms of hospitality," Crum said. (Reporting by Junko Fujita, editing by Malcolm Foster and Himani Sarkar)


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