 |
| Japan's real estate sector is experiencing a 'golden growth period'. A corner of Tokyo, Japan. (Source: AFP) |
“This is the golden age of Japanese real estate,” said Henry Chin, head of Asia- Pacific research at global real estate brokerage CBRE.
Japan has benefited from ultra-loose monetary policy at a time when the global economy is in a tightening cycle, he explained. The country’s real estate lending conditions are relatively easy, with a loan-to-value ratio of 70 percent and interest costs hovering around 1 percent.
Against this backdrop, the level of transparency and strong fundamentals of the retail and multifamily real estate segments (buildings or complexes with multiple units suitable for large families) have become fundamental factors driving the acceleration of the Japanese real estate market.
Koji Nato, Director of Capital Markets Research at JLL in Japan, said the number of foreign investors buying Japanese real estate increased by 100% in the first quarter of 2023 compared to the same period last year.
In a recently released report, JLL said that real estate transaction activity in Japan is among the strongest in the world , since the beginning of 2023. The key factor creating this phenomenon, according to JLL, is the ultra-low interest rate policy "which is widely believed to have the effect of keeping the Japanese real estate market resilient".
Specifically, JLL calculated that foreign investors doubled their investment compared to a year ago, to 2 billion USD, in the first quarter of 2023.
According to the latest data provided by CBRE, total foreign investment in the Japanese real estate market increased by 45% in the first half of 2023, compared to the same period in 2022.
Among investment markets, Singapore is the largest investor in Japan's commercial real estate sector, with a total investment of about US$3 billion from January to September 2023, followed by the US and Canada, with investments of US$2.58 billion and US$1 billion, respectively.
Source
Comment (0)