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Japan's commercial land prices ended a six-year drop last year as easy money drove investment, but prices outside the biggest cities continued their two-decade slide, government data showed. Nation-wide prices were flat on average, recovering from a decline of 0.5 percent in 2013 and ending a downtrend that has continued since 2008, according to the annual survey by the Ministry of Land, Infrastructure, Transport and Tourism.
The recovery was led by the Tokyo, Osaka and Nagoya regions, where prices rose 1.8 percent, accelerating from 1.6 percent in 2013.
Prime Minister Shinzo Abe's economic stimulus strategy, especially massive asset purchases by the central bank, have flooded financial markets with cash, much of which has flowed into stocks and real estate.
"Low interest rates have been boosting investors' appetite for property trades," said Yoshihiro Seguchi, director of the ministry's Land Price Research Division.
Still, the figures showed the recovery has been uneven.
Excluding the top three metropolitan areas, prices fell 1.4 percent for a 23rd consecutive decline. Land prices in 70 percent of Japan's smaller cities fell last year, the ministry said.
The value of commercial property transactions in Japan rose 14 percent to 4 trillion yen ($33 billion) in 2014, beating the 2007 peak, said DTZ, a global real estate services company. The figure was the highest on record since the Chicago-based company started compiling the data in 2002.
Last year, Singapore's sovereign wealth fund GIC bought an office tower in central Tokyo from alternative asset manager PAG for 170 billion yen.
Property developer Mori Trust bought an office and retail complex Meguro Gajoen from US buyout fund Lone Star for about 130 billion yen. It was flipped earlier this year to a fund led by China's sovereign wealth fund China Investment Corp.

Copyright Reuters, 2015

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