Japan Investment MarketView Q3 2026

Quarterly investment volume reaches new record of JPY 2.2 trillion;

Expected NOI yields remain flat despite continued rise in interest rates

• Commercial real estate investment volume reached JPY 2.21 trillion in Q3 2026, up 4% y-o-y and setting a new quarterly high. Four transactions exceeding JPY 100 billion were recorded during the quarter. Cumulative investment volume for the first nine months of the year also reached a record high. Office investment volume declined y-o-y; logistics was broadly flat; and residential, retail, and hotel posted y-o-y growth due to several large transactions.

• Acquisition volume by J-REITs (all transactions, including those below JPY 1 billion) totaled JPY 379.7 billion. Purchasing activity remained robust despite continued weakness in unit prices. Logistics was the most actively traded asset type in terms of both acquisitions and sales. The need to embark on unit repurchases and the substantial unrealized gains in their portfolios appear to be the drivers of asset sales by J-REITs.

• Expected NOI yields for Tokyo prime assets were unchanged across all asset types, remaining at historical lows despite rising interest rates. The CBRE Tankan Survey indicates that investors continue to hold a positive outlook for office NOI and logistics rents over the next two years, suggesting that many investors are anticipating rental growth for the coming quarters.