Sept. 9 (Bloomberg) -- Japan’s property stocks, including Mitsubishi Estate Co., had the biggest gain in more than two months after Tokyo was selected to host the 2020 Olympic Games.
The 45-member Topix Real Estate Index jumped 5.3 percent at the close of trading in Tokyo,the biggest gain since June 28. The index, which closed at the highest since May 20, was the best performer among 33 groups that make up the benchmark Topix. Mitsubishi Estate, Japan’s second-biggest developer, and Sumitomo Realty & Development Co. both rose 4.7 percent, while Mitsui Fudosan Co., the largest developer, surged 6.4 percent.
The economic effect of the games for the construction industry is about 475 billion yen ($4.8 billion), while the game will probably bring 152 billion yen to the property sector, according to International Olympic Committee estimates. Investments in road, bridges, stadiums and parks will benefit construction companies and developers while boosting property values in Harumi area near Tokyo Bay, where the majority of stadiums will be located, Deutsche Bank AG said.
“Olympics is one of the catalysts to make more investment in both private and public segment,” said Yoji Otani, an analyst at Deutsche Securities Inc. in Tokyo. “Sumitomo Realty and Mitsui Fudosan own the most land near Tokyo Bay area among developers, so they are set to benefit the most.”
The economic effect from the Olympic Games would be approximately 3 trillion yen for Japan, according to the Tokyo 2020 Bid Committee’s website.
“It will provide a great opportunity for Tokyo to become more international in a market place where the competition among major cities in Asia has intensified,” Hirotaka Sugiyama, president and chief executive office of Mitsubishi Estate Co., said in a statement. “As a developer, we will take this opportunity to consider our contribution.”
To contact the reporter on this story: Kathleen Chu in Tokyo at firstname.lastname@example.org
To contact the editor responsible for this story: Andreea Papuc at email@example.com