Developers in Tokyo’s bayside neighborhoods, where apartments were built on reclaimed land, are halting sales after Japan’s earthquake turned some of the landfill into mud, shattered pipes and severed water supplies.
Sekisui House Ltd. said it found defects in a Tokyo residential complex being built by Taisei Corp. and is rebuilding parts of the project where apartments sell for as much as $3.5 million. Shares of both companies fell.
Construction companies posted the best risk-adjusted returns among Japanese stocks since the country was struck by a record earthquake and tsunami almost two years ago, as the government rebuilt infrastructure and a new administration seeks to stimulate economic growth.
Mitsubishi Estate Co., Japan’s biggest developer by market value, halted sales of residential units in Tokyo after finding defects and will seek compensation from the builder Kajima Corp. The shares in both companies fell.
Japan’s real estate investment trusts may stall property sales and suspend fundraising plans in the short term as the nation’s strongest earthquake , tsunami and nuclear crisis damp investor appetite for assets.