The epic destruction wrought by the Japanese earthquake and tsunami last March should not have a direct effect on the credit quality of Japanese REITs (J-REITs), Standard & Poor’s said in a report.

But the agency warned that the longer-term impact of the devastation in the northeast of the country could undermine the business environment of the sector by hurting consumer sentiment and by crippling corporate performance, which could sap demand in leasing markets.

S&P said that the J-REITs it rates disclosed portfolio information after the earthquake, which showed they had by and large survived the events with only minor damage. Eight of the 11 J-REITs in S&P’s universe own 14 properties in Japan’s northeast, but none has more than 3% exposure to the region.

For more details, the S&P report is attached. 

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