In January-March 2017, real estate investment in Japan increased year-on-year, decreased in the world
Commercial real estate investment in Japan in the first quarter of 2017 (January – March) increased by 16% compared to the same period of the previous year to 11.1 billion dollars (yen denominated 1 trillion 260 billion yen, 1 dollar = Conversion to 113.64 yen), on the other hand, the real estate investment in the world decreased by 2% to 134 billion dollars. While the amount of investment worldwide has declined, the investment amount in Japan recorded a record increase over the previous year.
Increase in investment in Japan is due to popularity as a safe asset, yield-oriented toward low interest rate environment
The Japanese commercial real estate by domestic and foreign investors is strongly recognized as “safety asset”, and it is still popular. In addition, domestically, funds for seeking yields are strong with the background of low interest rate environment, mainly JREIT is strongly willing to buy. On the other hand, the owner who thinks the current time as the time to sell is gradually increasing in the price rise cycle lasting a few years. In other words, there is a possibility that the selling property of the seller side may increase, and there is a possibility that the transaction amount may increase from the previous year.
In particular, 1) Recovery of office market conditions in central Tokyo center spread to suburban areas / regional cities, the investor’s area of the buyer is expected to expand, 2) The number of investigations to sell large offices mainly in Tokyo bay area is increasing As a result, the possibility that transactions that had been expected to stagnate so far will increase from the previous year increased.
For reference, the amount of direct investment in domestic commercial real estate is shown below(source:JLL)