MarketDynamics
Keytrends
1
InvestmentExpansionAmidImproved ConditionsandLowerUncertainty
Globalrealestateinvestmentcontinuestogrow, supportedbydeclininginterestratesandan improvinglendingenvironment.Arecovery in investorsentimenthasalsobeen drivenby reduced uncertainty,aspolicyriskssuchasU.S. tariffmeasureshaveeased.InU.S.andEMEA markets,transactionsofhigh-qualityofficeassets havebeenincreasing.
3
MarketActivationFueledbyVarious Changes
Inadditiontomacroeconomicshiftssuchas inflationandinterestrateincreases, realestate markettrends includingrisingrents have promptedadjustmentsinoccupiers’ realestate strategiesandinvestors’investmentapproaches, boostingtransactionactivity.Financialinstitutions havemaintainedanactivelendingstance,further supportingthestrongmomentuminthe investmentmarket.
2
Record-High InvestmentVolumeinJapan
Numerouslarge-scaletransactionshavebeen recorded, includingofficebuildings,logistics facilities,andmultifamilyportfolios.Total investmentvolumeinJapanreachedarecord high ofJPY4.71trillionduringthefirsttothirdquarters. Tokyoretaineditspositionasthetop-ranked globalcityforrealestateinvestment.
4
Outlook
Theglobalrecovery inrealestateinvestmentis expected tocontinue,withoverseas investors projectedtoexpandtheirallocationstoJapan.As morecorporationssellnon-corerealestate holdingsandhigher-qualityinvestment opportunitiesincrease, totalrealestate investmentvolumeinJapanisanticipatedto exceed JPY6trillionin2025,backedbyresilient demand.
• Globalrealestateinvestment volume reachedUSD 573billioninthefirsttothirdquartersof2025,up21% year-on-year (y-o-y)inU.S. dollarterms.
• TransactionsintheAmericasincreased by26% compared tothesameperiod lastyear,whileEMEA (Europe, theMiddleEastandAfrica)sawa22%rise, andAsiaPacificrecorded 6%growth. Theoverall marketcontinued toexpand, supported bydeclining interestratesandanimproving lending environment worldwide.
• AcrosstheAsiaPacificregion, investment momentum remained steady.Whilesomemarkets,suchasChina andHong Kong, showed signsofslowdown, Japan andSouthKoreacontinued toseesolidinvestment expansion. However, thereareconcerns aboutthe potential impactofU.S. tariffpolicieson manufacturing activity,capitalinvestment andreal estatemarketsglobally.
Source:JLL
21%up
(1BillionJPY)
Japaninvestmentvolume
• Japan’srealestateinvestment volume reachedJPY 4.71trillioninthefirsttothirdquartersof2025,up 22%y-o-y (USD31.6billion,up23%).
• Inthethirdquarteralone, totalinvestment volume wasJPY1.52trillion,a22%increasefromthesame period lastyear(USD10.3billion,up23%y-o-y).
• Inaddition tolarge-scaletransactionsrecorded inthe firsthalfoftheyear,majordealswere observed in 3Q25,including Shiodome CityCenter andMatsushita IMPBuilding,aswellasthelargelogisticsfacilityESR AmagasakiDC.Thecumulativeinvestment volume for thefirsttothirdquarterswasthehighestsince records beganin2007.
Source:JLL 22%up
Globalcityrankingbyinvestment volume
Globalcityranking
• Tokyo recorded aninvestment volume ofUSD21.8 billioninthefirsttothirdquartersof2025, maintaining itspositionasthetop-ranked globalcity sincethefirstquarter.
• Osakaranked37thgloballywithaninvestment volume ofUSD3.0billionduring thesameperiod, slightlyupfrom 39thinthefirstquarterand unchanged fromitsposition inthefirsthalf.However, thisrepresentsasignificantdecline compared to18th placeinthesameperiod lastyear. Source:JLL
Historicalinboundinvestmentvolume
(1BillionJPY)
Inboundinvestments
• Inbound realestateinvestment –representing property acquisitionsbyoverseas investors –totalled JPY1.83trillioninthefirsttothirdquartersof2025, 3.9timeshigherthantheJPY465.8billionrecorded in thesameperiod lastyear.
• Inbound investment accounted for39%ofJapan’s totalrealestateinvestment volume during thesame period, arecord-high proportion.
Source:JLL
Historicalinvestment volumesharebySector
Sectoranalysis
• Officesectoraccounted forJPY2.28trillion,or49%of totalinvestment volume inthefirsttothirdquarters of2025,expanding from36%forthefullyear2024.
• Retailandmultifamilysectorsalsoincreased their sharescompared to2024,reaching 9%and18%, respectively. Incontrast,logisticsfacilitiesandhotels sawtheirsharesdecline to12%and10%, respectively.
• Multifamilysector'shighersharewasdriven byseveral largeportfolio transactionsinthethirdquarterof 2025.
Historicalinvestment volumesharebylocation
Locationanalysis
• Tokyo CBDaccounted for50%oftotalinvestment volume inthefirsttothirdquartersof2025,marking thefirsttimesincethesameperiod in2011thatthe shareexceeded 50%.Inaddition tolarge-scale transactionsinthefirsthalf,severalmajordealsinthe thirdquarter,suchaslargeoffice buildingsand multifamilyportfolios, contributed tothisincrease.
• GreaterOsakaaccounted for11%,down from19%in thesameperiod lastyear,despite notabledeals involving largeofficebuildingsandlogisticsfacilities. Thisdecline ispartlyattributedtoastronger preference forTokyo, Japan’s largestcity,asinvestors increasingly prioritisefuturerentalgrowthpotential amidinflation,alongwithitsadvantagesincorporate andpopulation concentration.
Source:JLL
TokyoCBD(5-ku)
(Excluding5-ku)
(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.
InvestmentYieldsforOfficeandLogisticsFacilities
Investmentyield
• Realestateinvestment yieldshadbeenonalongtermdownward trend buthaveremained largely stablesince2023,inlinewithglobalinterestrate increases.
• InJapan, yieldscontinued tostayflateven afterthe riseindomestic interestratesin2024.However, if ratesclimbfurther,yieldsforTokyo’s GradeAoffices, whicharecurrentlyinthelow2%range, areexpected toedge upslightly.
• Logisticsfacilitiesyieldsareanticipated toremain stable,supported byrelativelyhigherreturns compared toofficesandstrong demand fromboth domestic andoverseasinvestors.However, reflecting currentleasingmarketconditions, transactionshave become increasinglyselective interms oflocation andassetquality.
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
Hiroshi
Okubo HeadofResearch Research
Japan
hiroshi.okubo@jll.com
ManabuTaniguchi
Senior Director Research
Japan
manabu.taniguchi@jll.com
KojiNaito
ResearchDirector
CapitalMarkets
Japan
koji.naito@jll.com
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