Japan property shares fall after Anabuki bankruptcy

TOKYO: Japan property shares fell to a six- month low after developer Anabuki Construction Inc filed for bankruptcy with ¥140 billion (RM5.34 billion) in debt, the nation’s fifth-largest corporate failure this year.

The Topix Real Estate Index slumped as much as 2.5% to 692.51, the lowest since May 1, and traded 2.1% lower as of 11am in Tokyo on Nov 25. The broader Topix index was little changed.

Closely held Anabuki filed for protection from creditors on Nov 24, saying its condominium business had struggled as a result of the recession and tighter credit markets since last year. Condominium sales in Tokyo, the country’s biggest housing market, fell 20.1% in October.

“With declining wages and falling consumption, fears about a continued drop in the market are spreading,” said Mikio Namiki, an analyst at Mizuho Securities Co in Tokyo. “Condominium sales are still in a bad state because of the global economic crisis.”

Construction companies made up 27.1% of all bankruptcies in the country last month, according to Tokyo Shoko Research Ltd.

Real-estate companies had the second-steepest decline among the Topix’s 33 industry groups. Mitsui Fudosan Co, Japan’s largest property developer by revenue, sank 2.5% to ¥1,386 and Sumitomo Realty & Development Co, Japan’s No 3 property developer, dropped 2.8% to ¥1,401.

Anabuki, which has a further ¥10.9 billion in debt if the liabilities of two other subsidiaries are included, has approximately 2,060 creditors, according to Tokyo Shoko.

Aozora Bank Ltd, the Japanese lender controlled by Cerberus Capital Management LP, said on Nov 24 it is owed ¥12.7 billion by Anabuki.

The effect of the bankruptcy will be “slight” and won’t alter its full-year forecast, Aozora said. The shares fell 1.1%.

Chugoku Bank Ltd shares lost 2.6% after the lender said Anabuki owes it ¥3.63 billion. Hyakujushi Bank Ltd dropped 2.9% after saying it will write off ¥4.1 billion, and Shikoku Bank Ltd fell 3.8% after it said it may not be able to recover ¥1.3 billion in loans to Anabuki.

Property developers and managers have accounted for eight of the 10 biggest bankruptcies this year among listed Japanese companies.

Anabuki, based in Takamatsu in western Japan, follows failures by Japan General Estate Co, Joint Corp and Pacific Holdings Co, which had total liabilities of ¥529 billion. – Bloomberg LP

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