Japan Cap Rate Survey June 2023

CBRE’s latest quarterly cap rate survey found that expected yields in Tokyo remained unchanged for offices (Otemachi) and fell q-o-q across all other sectors (averages). Residential (both studio-type and multi-room) and hotels (management contract) recorded q-o-q declines of 10 bps. This meant that expected yields hit new record lows for residential apartments (at 3.70% for studio-type and 3.80% for multi-room), while hotel expected yields fell to 4.60%, just 10 bps above the pre-pandemic level recorded in December 2019. Expected yields for offices in regional cities fell in every major city other than Osaka and Yokohama, where they remained unchanged from the previous quarter.