Mortgage-backed securitization as the remedy to Japan's weak real estate sector was a recurring theme at last month's Fabozzi/IMN Conference on Real Estate Finance and Securitization in Japan. The prospect of a growing number of Japanese companies securitizing their real estate holdings was a topic that drew nearly 500 originators and arrangers of asset-backed deals to the Tokyo event.

But despite the huge potential of Japan's real estate market, significant obstacles remain before a liquid secondary market can be established. Falling commercial property prices, an undeveloped domestic investor base, and a banking sector unwilling to sell assets at a discount were some of the challenges outlined at the conference.

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