Domestic Investor Investments Doubling Yearly
Money Economy

Domestic Investor Investments Doubling Yearly!

Commercial real estate transaction volume (transactions of JPY 1 billion or larger) fell by 9% y-o-y to JPY 945.0 billion in Q3 2023, largely because of an 80% drop in investment by foreign investors. The number of large transactions worth more than JPY 50 billion also slipped to just one third of the figure from the same quarter last year. However, investment volume for the quarter exceeded pre-pandemic Q3 levels from 2016 to 2019. Investment volume by J-REITs and non-J-REIT domestic were both 2.4x that of last year.

Retail attracted the bulk of investment volume this quarter, at JPY 321.0 billion, up by 111% y-o-y, reports CBRE. This was almost entirely due to Yodobashi Holdings’ purchase of a portfolio held by Fortress Investment Group. The portfolio includes the land currently occupied by Sogo & Seibu’s Ikebukuro department store and is reported as having cost approximately JPY 300 billion.

Hotels and logistics also registered y-o-y increases in investment volume. The most significant increase was seen in the former, where transaction volume reached JPY 195.0 billion, some 3.5x Q3 2022’s figure of JPY 56.0 billion. J-REITs were responsible for 75% of investment in the hotel sector, headlined by Invincible’s acquisition from its sponsor of a hotel in Okinawa, Fusaki Beach Resort Hotel & Villas, for JPY 40.3 billion (at a 5.6% yield based on actual NOI).

While acquisition volume in the office and residential sectors fell y-o-y, Q3 2023 did see several transactions with record low yields or large deals of more than JPY 10 billion. In the office sector, Japan Real Estate acquired Forecast Sakaisuji Honmachi at an estimated NOI of 3.5%, while in the residential sector, Singapore’s City Developments purchased a portfolio from Canada’s BentallGreenOak for JPY 35.0 billion.

Related Articles

Investors/Business, General
Information, News
The rate of offices standing empty in central Tokyo in November dropped for the first time since the pandemic began, an early signal that the worst could be over for the capital’s property market. Vacancies fell by 0.12 percentage points to 6.35% in Tokyo’s five main business districts, real estate brokerage Miki Shoji Co. said on Thursday. Since hitting 1.49% in February 2020, the lowest since the country’s economic bubble burst in the early 1990s, vacancies have surged.
A question that arises as often as the sun is… “Can I get a loan for real estate investment in Japan?” Many first-time hopeful investors become very frustrated due to the severe lack of financing options for foreigners without residency. For cash buyers wishing to invest in a low-stress, fully secured and reliable deal, there may yet be hope! We propose a solution to this dreaded obstacle for wishful lenders and seasoned cash buyers to make the best of it!
General, Investors/Business
Japan's former Prime Minister Shinzo Abe, who was assassinated on Friday, July 8th, had aimed to transform and revitalize the economy. When his government took office it was faced with the daunting task of revitalizing Japan’s once dynamic economy, which was still in the shadow of the major slowdown during the so-called “lost decade” from around 1991 to 2001. Abenomics did help drive growth, though not at the pace that the country had seen during its post-war boom.
General, Investors/Business
You want to profit from the weaker yen and invest in Japan, but don't know where to start? Before diving into the market here, you’ll need a general investment strategy, something that will help you decide on where, how, and what to invest in! For those that have never stepped foot into the country, it may seem like an extra challenge with finding the best locations and criteria. Let’s break it down to make better sense of it... Follow these rules!