Investment by overseas investors in Japanese real estate in 2020 was up 24% y-o-y at US$11.71 billion. Despite border restrictions to curb the spread of COVID-19, overseas investors with Japan-based teams were able to continue their investment activity in 2020 relatively unimpeded.
The continuation of monetary easing policies worldwide is encouraging institutional investors to channel their funds into real estate in Japan. According to the results of CBRE's survey, Tokyo was named the most attractive city in Asia Pacific for cross-border investment for the second consecutive year, while Osaka also made the top ten.
Japanese outbound real estate transaction volume falls 68% y-o-y to US$1.16 billion. The major reason for the decline has been the implementation of lockdowns and border restrictions to prevent the spread of COVID-19, which has led to a stagnation in investment activity by investors without locally-based partners.
With overseas investment remaining a core tenet of the growth strategies of most investors, investment appetite remains generally strong. However, the issue of when travel restrictions might be relaxed will continue to weigh on outbound investment activity. Japanese outbound investment will likely remain heavily influenced by measures put in place by governments to halt the spread of the pandemic.