Japan Investment MarketView Q2 2023

August 4, 2023 5 Minute Read

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  • Total commercial real estate investment volume grew by 3% y-o-y to reach JPY 749.0 billion in Q2 2023, slightly above the average Q2 figure over the past five years.
  • Logistics sector recorded the largest Q2 volume on the back of several major transactions including a portfolio, which changed hands for a sum in excess of JPY 100 billion. Residential investment volume registered a y-o-y increase for the fourth consecutive quarter, underpinned by strong purchasing by Asian investors.
  • Tokyo expected yields for major asset types fell in all sectors other than office, which remained unchanged. Hotels (management contract) recorded a 10 bps q-o-q decline in expected yields, bringing them within 10 bps of Q4 2019 levels.
  • Meanwhile, the percentage of investors who indicated that expected yields for Tokyo offices and logistics facilities should rise over the next 12 months increased from a year ago. Fewer investors are willing to meet sellers’ asking prices, as the scope for upside in cashflow is seen to become more limited.