Six Reasons Why Japanese Property Will Soar |
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By: DailyWealth.com Posted: 2007-11-20 04:20:14 |
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The following statement was written by Steve Sjuggerud, who is the Founder of http://www.DailyWealth.com, one of America's most widely read financial e-letters.
I received an e-mail from my friend Peter Churchouse earlier this week... In his e-mail, he was excited about one area of the markets in particular... but before I tell you what market that is, let me share a little about Peter Churchouse... I look up to Peter. I used to read his writings every week when I started covering Asian stocks back in the early 1990s. Peter's a New Zealander, but he was based in Hong Kong as a managing director for Morgan Stanley back then. (He's still in Hong Kong today -- I spent a week with him there earlier this year.) Today, he's basically independent, working with a relatively small asset management company. Independence suits him... as he launched his unique hedge fund back in 2004. The fund focuses exclusively on Asian property stocks, and it's up an extraordinary 70% in the last two years. He continues to get it right. Last May, he told me about the no-brainer in Malaysian property stocks, as they were ignored by the mainstream. They soared. Then... In January, we met in Tokyo to talk about the incredible values in Japanese property stocks. We also came up with the idea for a book about investing in China. The basic idea was that China could be on the brink of the greatest financial asset mania the world has ever seen. Well, as you might have guessed... with China soaring, we've scrapped the book. I've returned the advance from the publisher. The China mania arrived before the book could hit the shelves. Now, Peter has once again turned his attention to Japanese property stocks... In his e-mail to me, he listed reason after reason why Japanese real estate is a great place for our money... -- Japanese REITs are a great bargain, down 29% since June 1. -- Dividend yields are the highest income plays in the country, in the 4% range. -- There's a huge incentive to borrow and buy properties, as "cap rates" (essentially the rent minus the costs of upkeep) are 4%-6%, while the cost of borrowing money is only 1.5%. -- Rents in Tokyo are up 30% in the past two years. -- The city is crawling with investment bankers looking to buy properties... companies like Goldman Sachs, which has already spent billions acquiring Tokyo properties. -- There is no supply... vacancy rates are tight at 2.6% and there isn't much new building taking place. Peter is right... the opportunity is enormous. Japanese property is literally selling at 1980s prices. It's unbelievable. In my newsletter True Wealth, I shared a product that I helped develop, which gives readers infinite upside potential in Japanese property stocks, with NO downside risk. Japanese property stocks may turn out to be the very best investment you can possibly make over the next five years. Good Investing, Steve Sjuggerud, editor, True Wealth and founder of http://www.DailyWealth.com |
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