Japan Investment MarketView Q4 2023

Investment volume falls 57% y-o-y due to high base of comparison and sharp decline in foreign purchasing​

• Commercial real estate investment volume in Japan fell by 57% y-o-y to JPY 660.0 billion in Q4 2023. While this was largely a product of the high base registered in Q4 2022, during which Otemachi Place changed hands for JPY 440.0 billion, it was also due to a 78% y-o-y decline in foreign investment, with overseas investors maintaining the cautious attitude they have adopted since mid-2023.

• By asset type, the most significant increase this quarter was seen in the residential sector, for which investment volume surged by 50% y-o-y to JPY 187.0 billion. The acquisition of a 20-property portfolio by a J-REIT for a total of JPY 46.9 billion contributed significantly. The retail sector also recorded a strong increase in investment volume, which rose by 48% y-o-y to JPY 115.0 billion.​

• Full-year 2023 investment volume was down by 3% from 2022, predominantly due to a 28% slide in foreign investment. By asset type, office transaction volume recorded the largest decline, falling by 43%.​

• According to the results of CBRE’s latest survey of investors in Japan, the percentage of investors planning to increase their acquisition volume in 2024 was down 6 pp. from the previous year’s survey, while those planning to increase sales volume were up by 9 pp. This suggests a weaker purchasing appetite among investors.