May 14 (Bloomberg) -- Properst Co., the Japanese property developer that had Madonna promote high-rise apartment sales in central Tokyo, filed for bankruptcy protection as the credit crisis pushed condominium sales to almost two-decade lows.
Properst’s liabilities totaled 55.4 billion yen ($597 million) as credit dried up after Lehman Brothers Holdings Inc. collapsed, leading condominium prices lower and denting demand, the Tokyo-based firm said in a statement today. The company will maintain its stock listing on the Jasdaq market as it undergoes the bankruptcy process, in part through capital raisings via private placement and debt equity swaps, it said.
New condominium sales in greater Tokyo last year fell to the lowest level in 17 years, commercial land prices declined to the lowest in at least 36 years, and real estate firms accounted for eight of the 10 biggest bankruptcies among listed Japanese firms in 2009. The filing marks the second by a listed real estate company this year amid a continued deterioration in Japan’s property market.
“Mid-to-small sized real estate firms are still struggling to sell condominiums,” said Takashi Ishizawa, an analyst at Mizuho Securities Co. in Tokyo. “I expect further consolidation, especially among smaller property firms going forward.”
Properst shares slid by their daily limit of 300 yen to 980 yen at the close of trading in Tokyo. The stock was 23 percent lower than yesterday’s closing price.
Established in 1987, Properst has focused its business on property developments in the metropolitan area ranging from small-sized apartments to condominiums in high-rise buildings.
Madonna was in advertisements for the Brillia Mare Ariake luxury condominiums in Tokyo Bay that went on sale in 2007.
Commercial RE Co., a real estate management company whose largest stakeholder is Goldman Sachs Group Inc., filed for bankruptcy protection on May 6 with 15 billion yen in liabilities.
New condominium sales in the Tokyo area totaled 36,376 units in 2009, the lowest in 17 years, and compared with the peak of 95,635 units sold in 2000, according to the Real Estate Economic Research Institute.
Japanese commercial land prices declined 6.1 percent in 2009, more than the 4.7 percent drop a year earlier, the Ministry of Land, Infrastructure, Transport and Tourism said in a report released in March. Values are at their lowest since the ministry began collecting comparable data in 1974.
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