Photographer: Kiyoshi Ota/Bloomberg

BOJ’s Negative Rates Put J-REITs in a Positive Position: Chart

The Tokyo Stock Exchange REIT Index has outperformed the Topix Real Estate Index since the Bank of Japan introduced its negative interest rates policy in January, with the gap at one point reaching the widest since 2005 as investors sought returns outside government bonds. “Lower borrowing costs have increased dividend yields for J-REITs as most of their profit goes into dividends,” says Masahiro Mochizuki, a Tokyo-based analyst at Credit Suisse Group AG. “Of course the real estate industry overall also benefits, but it takes time for them to profit after development, and they also pay more taxes,” he said.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.