The depreciation of the yen has attracted overseas investors to pay attention to Japanese commercial real estate, and transaction volume has increased by 20% this year.
With the continued decline of the yen, many overseas investors have been drawn to the Japanese commercial real estate market. The latest data released by Japan’s Ministry of Land, Infrastructure, Transport and Tourism revealed that Japan’s national commercial real estate price index saw a 2.0% month-on-month increase in the fourth quarter of 2023, with the three major urban areas of Tokyo and Osaka experiencing a 3.7% month-on-month increase.
A British investor shared his experience with reporters, stating that he began investing in the Japanese market 10 years ago and has acquired approximately 100 real estate properties in Japan, including office buildings and shops. The investor expressed optimism about this year’s investment returns due to the favorable exchange rate, anticipating a 15% increase.
A staff member of a Japanese real estate company highlighted the low vacancy rates of office buildings in Japan, particularly in major urban areas like Tokyo. With vacancy rates below 5.5%, investors have a higher chance of obtaining stable returns. The depreciation of the yen has also been advantageous for overseas investors, leading to a significant increase in inquiries from abroad.
Luo Liya, a staff member at a real estate company in Japan, noted a 30% year-on-year increase in inquiries from overseas investors this year, with a 20% rise in transaction volume. Most investors are interested in purchasing office buildings, with prices ranging from 500 million to 1 billion yen.
In addition to individual investors, large overseas real estate companies are also investing in large-scale projects such as logistics facilities in Japan. These projects require substantial funds, often raised in Japanese yen in Japan. Investors are closely monitoring the Bank of Japan’s monetary policy, anticipating potential interest rate hikes in the future, which could impact borrowing costs for overseas real estate companies in Japan.
Overall, the depreciation of the yen has sparked interest among overseas investors in Japanese commercial real estate, leading to an increase in transaction volume this year.
(Source: CCTV Finance)