Commercial Real Estate News
Commercial Investment in Japan Spikes 24 Percent Annually in Q3
According to CBRE, Japan's commercial real estate transaction volume rose by 24% year-over-year to JPY 1.207 trillion in Q3 2024, with large transactions exceeding JPY 10 billion doubling from the same period last year. The hotel sector led in transaction volume, increasing 72% y-o-y to JPY 335.0 billion, surpassing the JPY 300 billion mark for the first time since Q1 2008.
Office investment also saw a strong increase, up 78% from the previous year to JPY 304.0 billion. This brought the cumulative office investment volume for the first three quarters to about JPY 1.2 trillion, surpassing the total for all of 2023. With nationwide office rents on the rise, investor interest in this sector appears to be strengthening.
J-REIT investment volume for Q3 2024 (including transactions below JPY 1 billion) grew by 24% y-o-y, reaching JPY 394.6 billion, driven largely by hotel acquisitions. Total J-REIT sales volume for the quarter hit JPY 136.2 billion, more than double the amount in the same period last year. In the office sector, transactions included several properties whose owners were concerned about long-term competitiveness and profitability due to aging infrastructure and potential upgrade costs.
Expected NOI yields for Tokyo prime assets remained stable quarter-over-quarter for office and hotel sectors, while yields reached record lows in the residential and retail sectors. Conversely, expected NOI yields in the logistics sector increased by 6 basis points, returning to levels seen a year prior.
