Japan Investment MarketView Q4 2024

2024 investment volume reaches JPY 4.7 trillion,

highest for 10 years as foreign investors turn more active

• Commercial real estate investment volume for Q4 2024 increased by 68% y-o-y to JPY 1.26 trillion. Investment volume by foreign buyers increased by 3.3x, reflecting overseas investors’ renewed positivity. Hotel investment soared to JPY 449.0 billion, 3.7x the volume recorded in Q4 2023 and marking a new single-quarter record for the sector. Office investment volume spiked by 2.1x y-o-y to reach JPY 356.0 billion on the back of several major transactions by foreign investors.

• Total investment volume for 2024 reached JPY 4.66 trillion, 18% above the 2023 figure of JPY 3.96 trillion. The concentration of several major transactions in Q4 2024 meant that total net acquisition volume by overseas investors for the year exceeded JPY 6.8 billion.

• J-REIT acquisition volume for the quarter (all transactions including those below JPY 1 billion, based on announcement date) fell by 19.1% y-o-y to JPY 145.0 billion, with J-REITs still looking to overhaul their portfolios in response to struggling share prices. Sales volume by J-REITs reached JPY 203.2 billion, some 4.6x the figure from Q4 2023, and the highest volume recorded since Q4 2017. J-REIT office sales volume was particularly significant at JPY 128.7 billion, or 5.0x the volume recorded in Q4 2023.

• Expected NOI yields for Tokyo prime assets remained unchanged for a ninth straight quarter for offices and fell again to new record lows in all other major sectors. The logistics sector presented a decline of 9bps, following the increase recorded in Q3 2024.