Goldcrest Co and Atrium Co led a slump in Japanese real estate stocks yesterday after Sohken Homes Co filed for bankruptcy protection, reporting 33.9 billion yen (US$311 million) in debt.
Goldcrest, a condominium builder, had its biggest one-day decline in three months, falling 12 percent to 1,805 yen yesterday on the Tokyo Stock Exchange. Atrium, which offers property loans and liquidation services, dropped to its lowest point in more than one and a half years, declining 7 percent to 599 yen.
Tokyo-based Sohken said in a statement on Tuesday that difficulty in refinancing its debt was worsened by failures of other companies in the industry.
The company's shares, which had the biggest one-day drop in more than a week, will be de-listed on September 27.
Sohken's failure came a day after Sebon Corp, a closely held property developer, said it filed for bankruptcy. That announcement sent shares of Sebon subsidiary Asahi Homes Co to the lowest point in more than five years on Tuesday.
The Topix Real Estate Index, the second-worst performer among the 33 industry groups in the broader Topix index in the year ending on June 30, fell 1.9 percent yesterday to 1190.30. The real estate index has lost almost a quarter of its value so far this year, compared with a 17-percent slide in the Topix.
Property shares are likely to fall further, said Yoji Otani, a real estate analyst at Credit Suisse Group.
"There is a lot of bad news in the market at the moment, and more will come," Otani said in an interview with Bloomberg News. "There is no catalyst for a recovery in share prices in the real estate sector."
Construction and real estate companies accounted for almost a third of all bankruptcies in Japan last month as banks cut lending and the country's economy shrank to the brink of its first recession in six years.
The latest bankruptcy filing of a developer is adding to signs that more builders may go under.
