Japan Property Shares Fall After Anabuki Bankruptcy

Nov. 25 (Bloomberg) -- Japan property shares fell to a six- month low after developer Anabuki Construction Inc. filed for bankruptcy with 140 billion yen ($1.58 billion) in debt, the nation’s fifth-largest corporate failure this year.

The Topix Real Estate Index slumped as much as 2.5 percent to 692.51, the lowest since May 1, and traded 2.2 percent lower as of 10:52 a.m. The broader Topix index declined 0.1 percent.

Anabuki, based in Takamatsu in western Japan, filed for protection from creditors yesterday, saying its condominium business had struggled as a result of the recession and tighter credit markets since last year. Condominium sales in Tokyo, the country’s biggest housing market, fell 20.1 percent in October.

“With declining wages and falling consumption, fears about a continued drop in the market are spreading,” said Mikio Namiki, an analyst at Mizuho Securities Co. in Tokyo. “Condominium sales are still in a bad state because of the global economic crisis.”

Construction companies made up 27.1 percent of all bankruptcies in the country last month, according to Tokyo Shoko Research Ltd.

Real-estate companies had the second-steepest decline among the Topix’s 33 industry groups. Mitsui Fudosan Co., Japan’s largest property developer by revenue, sank 2.5 percent to 1,387 yen and Sumitomo Realty & Development Co., Japan’s No. 3 property developer, dropped 2.6 percent to 1,404 yen.

Anabuki, which has a further 10.9 billion yen in debt if the liabilities of two other subsidiaries are included, has approximately 2,060 creditors, according to the research firm.

Aozora Bank

Aozora Bank Ltd., the Japanese lender controlled by Cerberus Capital Management LP, said yesterday it is owed 12.7 billion yen by Anabuki.

The effect of the bankruptcy will be “slight” and won’t affect its full-year forecast, Aozora said. The shares fell 1.1 percent.

Chugoku Bank Ltd. shares lost 2.9 percent after the lender said Anabuki owes it 3.63 billion yen. Hyakujushi Bank Ltd. dropped 2.9 percent after saying it will write off 4.1 billion yen, and Shikoku Bank Ltd. fell 3.8 percent after it said it may not be able to recover 1.3 billion yen in loans to Anabuki.