Commercial Real Estate News
Commercial Property Investment in Japan Implodes 57 Percent Annually in Late 2023
Based on new data by CBRE, commercial real estate investment volume in Japan fell by 57% year-over-year to JPY 660.0 billion in Q4 2023. While this was largely a product of the high base registered in Q4 2022, during which Otemachi Place changed hands for JPY 440.0 billion, it was also due to a 78% y-o-y decline in foreign investment, with overseas investors maintaining the cautious attitude they have adopted since mid-2023.
By asset type, CBRE says the most significant increase this quarter was seen in the residential sector, for which investment volume surged by 50% y-o-y to JPY 187.0 billion. The acquisition of a 20-property portfolio by a J-REIT for a total of JPY 46.9 billion contributed significantly. The retail sector also recorded a strong increase in investment volume, which rose by 48% y-o-y to JPY 115.0 billion.
Full-year 2023 investment volume was down by 3% from 2022, predominantly due to a 28% slide in foreign investment. By asset type, office transaction volume recorded the largest decline, falling by 43%.
According to the results of CBRE's latest survey of investors in Japan, the percentage of investors planning to increase their acquisition volume in 2024 was down 6 pp. from the previous year's survey, while those planning to increase sales volume were up by 9 pp. This suggests a weaker purchasing appetite among investors.
