Brexit Impact on the Japanese Real Estate Market

08 Sep, 2019 –

If the Brexit referendum of 2016 is any indication, Japan and the Asian market could once again be top performers over fears that UK domestic stocks could be hit by a messy exit from the EU. Call it Brexit nervousness or fears over slowing growth in European equities, but take a look. Almost half of the top 10 best-performing funds were focused on the Asian markets. According to the Financial Times, the Top 10 best performing fund sectors in the UK were –

Although there are concerns of overheating in the Japanese real estate market particularly with prime office space in Tokyo where the price per sqm has been the highest since before the 2008 financial crisis, it’s not stopping major British and American funds as well as overseas investment firms from diving in to the Japanese property market. UK asset manager Aberdeen Standard Investments has set its sights on housing for seniors, acquiring existing properties to develop housing for seniors and the elderly, a sector expected to see continued stable returns as Japan’s population ages. Similarly, US private equity firm, KKR plans to combine real estate investments with private equity. ASI an asset manager with focus on Europe has been cleared to set up a real estate fund in Japan working with Orion Partners, a Hong Kong based firm and expecting to manage a portfolio of up to 100 billion yen. As well, one of the world’s largest sovereign wealth funds Norway’s Government Pension Fund Global purchased five Tokyo commercial properties in late 2017. And, in July 2019 Blackstone acquired 100 billion yen of logistics facilities.

Meanwhile, as the number of foreign tourists continues to surge, so does the construction boom for hotels. According to the Singapore Times, the number of foreigners visiting Japan increased by 8.7 percent in 2018 from the previous year of approximately 31.19 million people. In Tokyo and Osaka Prefecture, the average hotel occupancy rate continues to remain high at around 80 per cent.

For Japan, the property boom is not likely to end anytime soon. The fact that there are very few restrictions on foreigners buying property in Japan, volatility around the world or disappointing returns on domestic investments is expected to spike this thriving property market.

(Source – Priti Donnelly, Nippon Tradings International”, Pic – tokyoform)

This entry was posted in Japan Real Estate and tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink.