Introduction: 2025 brought momentum back; 2026 will be about choosing carefully
In 2025, real estate activity in Asia Pacific started to feel active again. People weren’t only watching and waiting—more deals and decisions happened. That doesn’t mean everything suddenly became cheap or easy. It means confidence improved, and attention returned to places where buying and owning property still feels more predictable.
PwC/ULI’s Asia Pacific 2026 report describes the mood as cautious but improving, and it again places major “gateway” cities (including Tokyo) near the top because they are large, stable, and generally easier to buy and sell in.
1) Asia Pacific: people are more willing to buy again
A CBRE survey said Asia Pacific net buying intentions reached 17% for 2026, up from 13% the year before. The same Reuters piece reporting on this also notes Tokyo remained the #1 city for cross-border investment for the 7th year in a row.
What this means in normal terms:
- More people believe it’s “okay to buy” again.
- But they are still picky—location, quality, and future demand matter more than ever.
2) Japan’s strongest “proof” in 2025: land prices rose again (and not only in Tokyo)
Japan has an official land price survey. Reuters reported that as of January 1, 2025, the year-on-year land price change was:
- Nationwide land prices: +2.7%
- Residential land: +2.1%
- Commercial land: +3.9%
- Industrial land: +4.8%
Two extra details from the same survey:
- The three major metro areas (Tokyo/Osaka/Nagoya) rose 4.3% (year-on-year).
- The four major regional cities (Sapporo, Sendai, Hiroshima, Fukuoka) rose 5.8% (year-on-year).
Simple takeaway: Japan’s overall trend was up again, and several regional city markets also had strong price growth.
3) Tourism mattered a lot in 2025—and it affects property in very real ways
Tourism changes demand for hotels, retail streets near tourist areas, and some mixed-use neighborhoods.
Confirmed annual tourism numbers for calendar year 2025:
- 42.7 million international visitors in 2025 (record; first time above 40 million), reported by Nippon.com citing JNTO.
- ¥9.5 trillion in total international visitor spending in 2025 (record), reported by Nippon.com citing Japan Tourism Agency preliminary figures.
What this means in plain terms:
- In a strong tourist area, hotel income can rise quickly when demand is high.
- But “too many tourists” can also cause local complaints and tighter rules, which can change what owners are allowed to do.
What happened by property type (and what to watch in 2026)
4) Homes, condos, and small apartment buildings: the gap widened
In 2025, the gap grew between:
- properties in convenient places (near stations, popular neighborhoods, good schools), and
- properties that are cheaper mainly because the location is inconvenient or the building has problems.
Two real-life examples:
- A condo that is well-run (good management, repairs planned, reserve fund healthy) is easier to rent and resell than a similar condo where repairs are delayed and the building feels “tired.”
- A “cheap” house far from jobs and transport may be cheap for a reason: fewer future buyers, more vacancy risk, and repairs that don’t raise the resale value much.
2026 watchpoint: building condition and management quality will matter even more because repair and renovation costs remain a real constraint. Reuters’ summary of the CBRE survey specifically flags construction and labor costs as a key challenge.
5) Office: Japan did not follow the global “office is dead” story
Japan’s office market—especially better buildings—remained tight in late 2025.
CBRE’s Japan Office MarketView Q4 2025 reported for Tokyo:
- All-Grade vacancy: 1.6% (a vacancy rate = share of space that is empty)
- Grade A vacancy: 0.7%
- Grade A “assumed achievable rent”: JPY 41,050 per tsubo (CBRE reports this rent series in JPY/tsubo, and it is presented as a market rent level for Grade A space in that quarter)
Quick translation:
- Vacancy means how much space is empty. When vacancy is low, landlords often have an easier time renting space.
- Grade A usually means newer, higher-quality buildings.
- Assumed achievable rent is CBRE’s estimate of the rent level that can realistically be achieved in the current market for that grade/category of building.
CBD vs “hub areas” (simple version)
Think of office areas in three buckets:
- Central business areas: best buildings tend to stay strong.
- Major station hubs: can do well because they are convenient and reduce commute time.
- Older buildings in weaker areas: can struggle unless owners spend money to upgrade them.
Why this matters even if you don’t buy offices: strong office areas often support nearby housing demand, retail demand, and redevelopment.
6) Logistics / industrial: still supported, but location matters
Industrial land rose 4.8% year-on-year in the official land survey, helped by development of large logistics facilities linked to e-commerce needs.
Plain explanation:
- Warehouses and distribution centers are needed as long as people keep shopping online and companies keep moving goods.
- But not every location works the same—access to highways, ports, and population centers matters.
7) Hotels and hospitality: demand is strong, but running them well is crucial
The tourism numbers explain why hotels performed strongly in many areas. But hotel results depend heavily on:
- staffing (labor shortages can hurt service)
- operating costs
- renovation needs
- online reviews and reputation
In 2026, the best hotel properties will usually be the ones that are well-managed and positioned in areas with steady demand, not only “seasonal spikes.”
8) Retail: not “everywhere,” but the right streets still do well
Retail is strongest where people actually walk:
- popular station areas
- tourist streets
- redevelopment zones that bring new foot traffic
A common mistake is thinking “the city is strong, so any retail unit is strong.” In 2026, “which street” will matter more than “which city.”
9) Data centers: a major 2026 theme, but hard to access directly
PwC/ULI’s APAC 2026 work highlights strong interest in data centers and digital infrastructure going into 2026. Plain explanation:
- AI and cloud services need more data centers.
- These projects depend on power supply and long planning timelines, so they are not simple.
Regional Japan: where the momentum is outside Tokyo
10) Osaka and Nagoya
Reuters reported the three major metro areas (Tokyo/Osaka/Nagoya) rose 4.3% year-on-year in the land survey. In 2026, these cities can be solid—especially in areas with:
- strong station access
- clear long-term demand
- buildings that won’t require surprise repair costs
11) Sapporo, Sendai, Hiroshima, Fukuoka
Reuters reported these four regional cities rose 5.8% year-on-year. In 2026, the same rule applies: the best results usually come from buying in the strongest sub-areas (near hubs, near demand, near infrastructure), not “anywhere because it’s cheaper.”
What this means for buyers vs sellers in 2026
If you’re buying
Four practical questions:
- Who will want to rent or buy this later?
- What repairs will be needed in the next 5–10 years?
- Are there red flags in management (condos) or building condition (houses/apartments)?
- Is the location convenient enough that the next buyer won’t hesitate?
If you’re selling
The easiest way to protect price is clarity:
- clean repair history / management records
- clear explanation of the location’s strengths
- honest disclosure of issues (surprises later often kill deals)
In summary
Japan’s official land prices rose again in 2025: +2.7% nationwide year-on-year (residential +2.1%, commercial +3.9%, industrial +4.8%).
- Regional cities also rose strongly: Sapporo/Sendai/Hiroshima/Fukuoka +5.8% year-on-year (growth slowed partly due to higher construction costs).
- Tourism hit record levels in 2025: 42.7 million visitors and ¥9.5 trillion annual spending.
- Tokyo’s better office market stayed tight in late 2025 (CBRE: Grade A vacancy 0.7%, Grade A assumed achievable rent JPY 41,050 per tsubo).
- Asia Pacific confidence improved heading into 2026 (CBRE survey: net buying intentions 17%, up from 13%).
How Nippon Tradings International (NTI) Assists Investors in This Market
2025 showed us something important: Japan rewards preparation.
Opportunities still exist across residential, hospitality, logistics and niche commercial sectors. But success depends less on chasing trends and more on understanding local rules, pricing realities, and long-term demand.
This is where NTI supports clients.
1. Clear Market Insight (Without the Noise) – We translate high-level data into practical meaning. For example:
- What does Tokyo Grade A office rent at JPY 41,050 per tsubo (assumed achievable monthly rent) actually imply for yields?
- How does a weaker yen impact acquisition timing?
- Where are tourism numbers supporting real demand versus speculation?
We focus on what affects real cash flow and long-term value.
2. On-the-Ground Due Diligence – Japan is detail-driven. Zoning, rebuilding restrictions, management rules, and tenant dynamics all matter. We help investors:
- Understand building age and compliance issues
- Review management quality and repair reserves
- Assess realistic rental assumptions
Small details often determine whether a property performs or disappoints.
3. Practical Strategy, Not Hype – Rather than chasing headlines, we help clients:
- Align asset type with their risk tolerance
- Plan realistic holding periods
- Structure financing appropriately
- Prepare for currency considerations
The goal is steady performance, not short-term speculation.
4. Long-Term Perspective – Japan remains one of the most transparent and stable real estate markets in Asia Pacific. While interest rates may gradually normalize in 2026, Japan’s relative stability, strong infrastructure, and deep rental markets continue to attract both domestic and international capital.
Investors who approach the market carefully — with local insight and realistic expectations — are likely to find solid opportunities.
Nippon Tradings International (NTI) remains committed to helping clients navigate Japan’s property landscape with clarity, discipline, and long-term thinking.
