MarketDynamics
Keytrends
1
Investmentexpandsasborrowingcosts decline
Globalrealestateinvestmentvolumecontinuesto expandduetodeclininginflationrateand borrowingcosts.Bysector,industrialrealestate suchaslogisticsfacilitiesfacesawait-and-see approachduetouncertaintiesincludingUStariff policy.Officeinvestmentisexpanding,particularly intheAsia-Pacificregion.
3
Strongdemandabsorbsincreasedsales volume.
Theevolvingeconomicenvironment,including risingprices andinterestrates,isprompting investorsto reviewtheirportfoliosandcompanies tomodifytheirrealestatestrategies,leadingto increased propertysales.Supportedbyfinancial institutions'proactivelendingstance,thereal estateinvestmentmarketcontinuestothrivedue torobustinvestmentdemandfromdiverse domesticandinternationalinvestors.
2
Japan’sinvestment volumeexceedsJPY threetrillioninfirsthalf.
Followingastrongfirstquarter,multiplelargescalepropertytransactionsdroveJapan's transactionvolumeaboveJPYthreetrillioninthe firsthalf thefirsttimesince 2007.Large-scale officeandmultifamilyportfoliotransactionswere seen incentralTokyo,propellingTokyotofirst placeamongglobalcitiesforinvestmentvolume.
4
Outlook
ThegrowinguncertaintyfromUStariffpolicyhas littleimpactonJapan'srealestateinvestment market.Consideringrecentdevelopments regardingtariffsanddomesticcorporate responses, theimpactisexpected toremain limited.Duetoincreased investment opportunitiesandsustainedstrongdemand,real estateinvestmentvolumein2025isprojectedto exceed 2024levelsandreachnearlyJPYsixtrillion.
• Globalrealestateinvestment volume increased 21% y-o-ytoUSD358billionin1H25.
• TransactionsintheAmericasincreased 23% compared tothesameperiod lastyear,EMEA (Europe, MiddleEastandAfrica)rose25%,andAsiaPacificgrew 17%.Growthcontinued duetodeclining borrowing costsandimproved lending conditions.
• TheAsia-Pacificregion maintained strong performance withlarge-scaletransactionsobserved acrossmultiplecountries. Cross-bordertransactions, inparticular,arerecovering. SouthKorea, Australia, Singapore, andHong Kong experienced positive effectsfromlowerborrowing costs,thoughconcerns remainregarding theimpactanduncertainty ofUS tariffpolicy oninvestment markets.
Source:JLL
• In1H25,domestic realestateinvestment volume was up11%q-o-q and22%y-o-y toJPY3,193.2billion (USD21.3billion,up23%y-o-y).
• Duetotransactionsinthefirstquarterinvolving large officebuildingssuchasTokyo GardenTerrace Kioicho andmajorretailfacilitiessuchasTokyuPlaza Ginza,thehalf-yearinvestment volume exceeded JPY threetrillionforthefirsttimesincethesecond halfof 2007.
Source:JLL 22%up
Globalcityrankingbyinvestment volume
Globalcityranking
• Inglobalcityinvestment rankings,Tokyo maintained firstplacefromthefirstquarterwithinvestment volume ofUSD16.0billionin1H25.
• Osakaranked37thplacewithaninvestment volume ofUSD2.0billionin1H25,risingslightlyfrom39th placeinthefirstquarterbutdeclining significantly from18thplaceinthesameperiod lastyear.
Source:JLL
Inboundinvestments
• Inbound investment, whichrepresents realestate purchasesbyoverseas investors,reached JPY1,094.8 billionin1H25,increasing3.7timescompared toJPY 297.8billioninthesameperiod lastyear.Thismarks thefirsttimesince1H07thatfirst-halfinbound investment hasexceeded JPYone trillion.
• Theshareofinbound investment indomestic real estateinvestment volume was34%in1H25,the second highestforafirsthalfafter36%in2020.
Historicalinboundinvestmentvolume
Historicalinvestment volumesharebySector
Sectoranalysis
• Theshareofofficeinvestment reached JPY1,703.7 billionin1H25,accounting for53%.Thisexpanded from44%inthesameperiod lastyearandmarked thefirsttimethefirsthalfexceeded 50%since2018.
• Retailexpanded from8%inthesameperiod lastyear to12%.Meanwhile,logisticsfacilities,hotels,and multifamilyhousingdecreased fromthesameperiod lastyearto11%,10%,and13%,respectively.
Historicalinvestment volumesharebylocation
Locationanalysis
• Tokyo CBD,whichsawmultiplelarge-scaleofficeand retailtransactionsinthefirstquarter,accounted for 56%ofthetotaldomestic investment volume in 1H25,exceeding 50%forthefirsttimesince1H18.
• TheshareofGreaterTokyo (excluding Tokyo), comprising Chiba,SaitamaandKanagawa prefectures, whichsawtransactionsincluding YokohamaPlazaBuildingandmultiplelarge-scale logisticsfacilities,expanded from8%inthesame period lastyearto11%.
• TheshareofGreaterOsakaremained atonly10% despite multiplelargeofficetransactions,contracting significantlyfrom21%inthesameperiod lastyear.
Source:JLL
TokyoCBD(5-ku)
Osaka
(Excluding5-ku)
Nagoya
Tokyo(ExcludingTokyo)
Note:TokyoCBC(5-kus)referstoChiyoda-ku,Chuo-ku,Minato-ku,Shinjuku-kuandShibuya-ku;GreaterTokyoreferstoTokyo,Chiba,SaitamaandKanagawa;GreaterNagoyareferstoAichi, GifuandMie;GreaterOsakareferstoOsaka,Hyogo,KyotoandNara; GreaterFukuokareferstoFukuoka,Saga,Nagasaki,Kumamoto,Oita,Miyazaki,KagoshimaandOkinawa.
Historicalinvestment volumesharebylocation
Investmentyield
• Realestateinvestment yieldshadbeenonalongtermdownward trend, buthaveremained flatsince 2023amidrisingglobalinterestrates.
• Realestateinvestment yieldshaveremained flateven afterJapan's interestratehikein2024.However, if interestratesrisefurtherinthefuture,Tokyo GradeA officeyields,whicharealreadyinthelow2%range, areexpected toincreasemodestly.
• Logisticsfacilityyieldsareexpected toremainflat, considering theirhigheryieldscompared tooffices anddemand fromdomestic andinternational investors.
Source:JLL
TokyoGradeAoffice GreaterTokyologisticfacilities
JonesLangLaSalleK.K.
Tokyo Headquarters
KioiTower,
Tokyo Garden Terrace Kioicho
1-3Kioi-cho Chiyoda-ku, Tokyo 102-0094
+81343611800
Kansai
Nippon Life
Yodoyabashi Building
3-5-29KitahamaChuo-ku, Osaka541-0041
+81676628400
Fukuoka
FukuokaDaimyoGardenCity
2-6-50Daimyo, Chuo-ku,Fukuoka-shi
Fukuoka810-0041
+81922336801
Nagoya
JPTowerNagoya
1-1-1Meieki, Nakamura-ku,Nagoya-shi
Aichi450-6321
+81528563357
Formoreinformation,pleasecontact
Takeshi Akagi
HeadofResearch Research
Japan
takeshi.akagi@jll.com
COPYRIGHT ©JONESLANGLASALLEIP,INC.2025
ManabuTaniguchi
Senior Director Research
Japan
manabu.taniguchi@jll.com
TomomiKemmochi Senior Manager Research
Japan
tomomi.kemmochi@jll.com
KojiNaito
ResearchDirector
CapitalMarkets
Japan
koji.naito@jll.com
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