Japan’s Calamities

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It is a very unfortunate situation for Japan to go through so many testings all at the same time. After the 8.9 richter scale shocking earthquake, a killer tsunami pratically wiped out the costal towns along its path. To top that up are the problems with the nuclear reactors at Fukushima Daiichi. If that is not enough, snow is blanketing the northern side of Japan, making rescue work difficult. At the same time, there is an exodus from Tokyo due to the fear of nuclear contaminants. How bad can it get? Our hearts go out for the Japanese & hope that they recover from these calamities quickly.

On the economic front the tsunami destroyed a lot of infrastructure which would need time and money to fix. That would mean a few months of inability to manufacture and export at full capability.

What about the investment situation there? For one, investment in real estate along the coast would be minimal as no one would want their investment wiped out in the event another earthquake & tsunami combination hits again. The cleanup of the coastal towns in the Miyagi prefecture thereabouts would take quite a while and no new investment buildings would come up there. Tokyo, traditionally the investors' haven, suffers the worry of a big earthquake and, at the moment, the risk of contamination from the damaged reactors in the north.

From the real estate view, the investors are likely to skip Japan for the mid term and look toward countries like Hong Kong and Singapore for safety in their investment. Unfortunately this is one case where Singapore would benefit from the other people's misfortune. However, the investment market in Singapore is driven mostly by PRC, Malaysian and Indonesian buyers. US and European buyers are a smaller percentage. Our expectation is that the impact would not be so great.

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