Japan's rising real estate values are spilling over its three major metropolitan areas -Tokyo, Osaka and Nagoya, where the upturn began, according to a survey by released by the land ministry, as foreign money continues to pour into the market. The outlying areas seeing price rises benefit from three factors - foreign tourism, industrial investment in areas such as semiconductors and redevelopment projects.

Fujitsu is joining the exodus of companies moving their main offices out of Tokyo as remote work catches on in Japan and reduces the need to maintain expensive office space. It said the move is the result of a review of the company’s office needs now that so many employees are working from home. The tech giant announced on Sept. 22 that they will relocate their HQ from Minato-ku to Kawasaki city by the end of September next year.

Singapore became the biggest investor in Japan’s real estate sector this year, lured by the yen’s weakness and growing demand in logistics and hospitality industries. Inflows from the city-state totaled almost $3 billion so far in 2023, followed by investors from the US, Canada, and the United Arab Emirates.

A Tokyo-listed REIT sponsored by property giant Mitsui Fudosan has acquired a portfolio of three hotels in Japan for JPY 3.1 billion ($21.2 million). The J-REIT picked up the three-asset portfolio’s highest-valued property, the 128-room Smile Hotel Okinawa Naha, the 97-room Smile Hotel Matsuyama on Shikoku, and the 106-room Smile Hotel Nishi-Akashi west of Kobe.

Mitsubishi Estate was chosen by Yokohama City as the developer of the theme park in the city of Yokohama, that will rival the size of Tokyo Disneyland. It is scheduled to open around 2031, with an expected annual visitor count of 12 million people. 

Robust demand for lodging by visitors and rising prices create an ideal scenario for investment. In fact, foreign investors have spent US$2 billion on hotel deals in Japan so far in 2023, the most compared with any other sector in Asian commercial property, according to MSCI Real Assets.

Real estate prices rose in Japan in 2022, and are expected to continue and rise in 2023. Of course, real estate prices only rise….until they don’t - but in the case of Japan, a number of factors, including inbound demand, ultra-low interest rates, higher costs of labor and construction, all but ensure that 2023 will be more of the same, as COVID restrictions are further weakened.

The Japan Real Estate Experts Panel (JREP) members have gathered at a beautiful venue in Tokyo, bringing together over 80 Japan real estate property enthusiasts to talk shop, gather info and network, at a phenomenal event which will surely be the first of many!