Japan Investment MarketView Q3 2022

Investment appetite remains strong; overseas investors complete several large transactions

• Although Japan commercial real estate Investment volume fell by 19% y-o-y to JPY 971.0 billion in Q3 2022, it still exceeded the figure registered in Q3 2019, prior to the onset of the pandemic. Overseas investment volume rose by 360% y-o-y, with several large-scale transactions noted.
• Average expected yields for Tokyo fell in all sectors other than hotels, where they remained unchanged. CBRE’s latest Tankan Survey showed that the Diffusion Index (DI) worsened in the category of “stance on investment and loans” for both Tokyo Grade A offices and logistics facilities (multi-tenant). In terms of future projections, however, there was a rise in the number of respondents indicating that they planned to accelerate investment activity, with fewer indicating plans to suppress it.
• Hotel transactions have begun to be seen in the second half of the year. This is due to the improved outlook in the hotel market. Hotel investment volume in Q3 increased for the second consecutive quarter and is expected to increase further.