In and Out Japan 2022

Inbound real estate investment

• Inbound investment into Japan reached US$9.96 billion in 2022, a 9.2% decrease from the previous year. However, the fall was mainly due to the depreciation of the yen, and the investment amount in yen actually increased by 12% to JPY 1.3 trillion. 
• Offices remained the most popular asset type, accounting for 39% of total investment volume, followed by residential properties, which increased by 12 pps to 25%. 
• Overseas investors who primarily invest in Japan are generally becoming more cautious. However, the Japanese investment market offers high liquidity and a positive yield spread, making it one of the few markets with such characteristics. CBRE’s survey named Tokyo as the top city in Asia Pacific for cross-border investment for a fourth consecutive year. 

Outbound real estate investment

• Japanese outbound investment reached US$3.39 billion in 2022, up 76.5% y-o-y, led by investment in Singapore and the U.K. 
• Outbound investment in offices was the highest since 2005. Japanese investors seem to have determined that they can capture demand for office returns if the properties are of a high quality.
• CBRE’s survey found that North America remains the most attractive investment destination for Japanese investors, followed by developed Asia. Amid increasing uncertainty about the global economy, Japanese investors are relatively more focused on market size and liquidity rather than market growth in the near term.