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, according to Knight Frank LLP.

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, according to a report published this month.

Singapore’s sovereign wealth fund GIC Pte’s purchase of six warehouses in Japan from Blackstone Inc. for $800 million contributed significantly to that, said Christine Li, Knight Frank’s head of Asia-Pacific research, in the report.

Goldman, KKR, Blackstone Join Investor Rush for Japan Hotels

GIC Chief Investment Officer Jeffrey Jaensubhakij recently described Japan as a “very cheap” market where value can be realized, and with a long way to run. International investors are also attracted to its low borrowing costs, and putting more money into hotels because of a post-pandemic tourism boom.

Foreign investors, including Goldman Sachs Group Inc., KKR & Co., Blackstone Inc., have spent a combined $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.

Japan’s surge in hybrid work arrangements and rising supply has eroded investors’ appetite for the office sector, Knight Frank said in the report.