Japan Investment Major Report - In and Out H1 2022

Inbound real estate investment

• Inbound investment into Japan was US$2.38 billion in H1 2022, a 50% decrease from the same period of the previous year. While investor demand remained strong, the limited number of properties available for purchase constrained investment volume.
• All major sectors saw investment volume decline y-o-y, althogh there were several large-scale deals for office and residential portfolios.
• A few large deals are due to be closed in H2 2022. Yield spreads should remain high relative to overseas markets, which is likely to continue to attract foreign capital.

Outbound real estate investment

• Japanese outbound investment totalled US$1.65 billion in H1 2022, up 26% y-o-y. The main driver was an increase in investment volume in the UK.
• Outbound investment volume in the office, residential and hotel  sectors was higher in H1 2022 than in the same period of the previous year. Office investment volume was up 267% y-o-y, a level above the six-month period immediately prior to the onset of the COVID-19 pandemic.
• Japanese outbound investment is on a recovering trend from the effects of the pandemic. That said, rising costs due to inflation have led some investors to rethink investment strategies such as development. CBRE expects Japanese investors to become more selective in the coming months, which may weigh on investment volume in H2 2022.