Japanese outbound real estate transaction volume triples y-o-y to US$ 1.9 billion; institutional investors accelerate overseas investment through funds
CBRE today released "Japanese Outbound Real Estate Investment H1 2019". The report summarizes recent trends in foreign direct investment by Japanese investors and provides an in-depth analysis of overseas activity involving Japanese institutional investors and real estate developers.
Highlights
Japanese outbound investment: Investment within Asia exceeds that in the Americas
Japanese outbound investment volume stood at US$ 1.9 billion in H1 2019, an increase of 299% y-o-y. The most popular destination for investment (direct investment) was Asia (US$ 0.93 billion), followed by the Americas (US$ 0.90 billion). Within Asia, Singapore, Korea, and China were the most popular investment destinations (Figure1).
Figure1: Japanese Outbound Investment by Region
Japanese outbound investment: Growth in investment led by real estate funds
New funds formed by developers and trading companies have attracted investment from institutional investors this year, leading to an increase in acquisitions by real estate funds. Investment by real estate funds in H1 2019 amounted to US$820 million, the highest transaction volume by funds on a half-year basis since 2005. Based on trends among advisors to institutional investors, CBRE estimates that indirect investment (such as investment by institutional investors in funds and funds of funds) is likely to have exceeded US$ 7.0 billion since 2018 （Figure 2).
Figure 2: Japanese Outbound Investment by Type of Investor
Asuka Honda, Director of CBRE Research, commented: "Outbound investment from Japan is expected to continue to increase, supported by a strong appetite among developers and trading companies to expand their overseas business, and a growing desire among institutional investors to seek greater regional diversification of their real estate investments. However, some institutional investors are becoming more cautious towards outbound investment due to concerns of a possible global economic downturn, meaning that the pace of overseas purchasing could slow."
The report is available for download at:
https://www.cbre.co.jp/en/research-reports/investment-reports
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