Foreign investors spend more than 7.7 billion USD buying real estate in Japan

According to data from CBRE Japan, the total value of real estate purchases by foreigners from January to June reached 1.14 trillion yen ($7.76 billion) - the highest level in the first half of the year.

Foreign investors continuing to pour money into Japanese real estate will keep real estate prices high - Photo: Flickr/TTXVN

Foreign purchases of Japanese real estate surged to a record in the first half of 2025, with other major purchases underway as analysts predict rents will continue to rise amid rising inflation.

A promising market

The total value of real estate purchases by foreigners from January to June reached 1.14 trillion yen ($7.76 billion) - the highest in the first half of the year, according to data from CBRE Japan since 2005. Of this, office buildings accounted for more than 40%.

The growth is partly due to expectations of higher rents and greater returns than in Europe and the US. This influx of foreign money is helping to push up property prices.

US-based Blackstone acquired the Tokyo Garden Terrace Kioicho mixed-use property for $2.6 billion in February 2025, one of the largest-ever real estate purchases in Japan by a foreign investment firm.

"Japan is one of the most promising markets in the world ," said Blackstone's head of Japan real estate Daisuke Kitta.

In the commercial real estate sector, Hong Kong (China)'s Gaw Capital Partners acquired the Tokyu Plaza Ginza shopping mall for more than $1 billion.

The investment firm will continue to focus on great properties in prime locations where it sees the potential to create long-term value, a representative said.

In residential real estate, US-based Warburg Pincus has acquired a network of large multi-family properties concentrated in Tokyo.

The view that inflation will continue to occur is the catalyst for these deals.

Will real estate prices continue to stay high?

Japan's consumer price index (CPI), excluding fresh food, rose 3.1% year-on-year in July. The figure has hovered around 3% for eight consecutive months. Many market watchers see the possibility of office rents rising.

The return of office workers after the COVID-19 pandemic is a factor that makes the supply and demand situation of office space in urban areas more difficult.

"Rent prices will continue to rise for large new buildings in prime locations," said Toyokazu Imazeki, chief analyst at Sanko Estate.

The second big reason for the wave of foreign investment is the profitability of Japanese real estate by international standards.

The yield gap between real estate investment yields and long-term interest rates will reach 1.9% in the Tokyo metropolitan area from the first quarter to the third quarter of 2025, far exceeding New York City's 1.7% and London's 1.2%, according to estimates by Sumitomo Mitsui Trust Research Institute.

"Office buildings in Japan are still more attractive for investment than similar buildings elsewhere in the world," said Shota Otani, head of investment research at the Investment Research Institute.

Foreign investors are also being driven by real estate divestments from listed companies that are trying to improve asset efficiency.

“Active investors are calling for more real estate sell-offs,” said Kunihiko Okumura, co-head of Asia- Pacific at US-based LaSalle Investment Management.

The trend appears set to continue. US investment firm KKR has made the highest bid for the Yokohama headquarters that troubled Nissan Motor is proposing to sell. The expected price is close to 100 billion yen.

Beverage giant Sapporo Holdings has decided to sell its real estate business. Yebisu Garden Place, a multi-purpose complex in a prime location in Tokyo, is one of the most notable properties.

The group plans to use the proceeds from the sale to invest in its beer business.

"Many foreign investors are expecting inflation and rising rents, so this level of investment is likely to continue in the near future," said Tomoya Nose, deputy director of CBRE Japan.

As long as foreign investors continue to pour money into Japanese real estate, property prices are expected to remain high.

Data from Tokyo Kantei showed that the average asking price of used condominiums in Tokyo's 23 wards hit a new record in July - up 1.4% from the previous month to 104.77 million yen per 70 square ^meters .

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According to VNA

Source: https://tuoitre.vn/nha-dau-tu-nuoc-ngoai-chi-hon-7-7-ti-usd-mua-bat-dong-san-tai-nhat-ban-20250831160452615.htm