Japan Research|
May 2024
InvestmentMarket Summary
JapanCapitalFlow
1Q2024
Japansurgesasoffice transactionsinTokyoCBD regainmomentum
GlobalInvestmentVolume
Globalrealestateinvestment volumesfell6% y-o-yinthefirstquarterof2024toUSD135 billion.TransactionsintheAmericas were down8%y-o-y,andinEMEA(Europe,the MiddleEastandAfrica),theywere down15% y-o-y.InAsia-Pacific,theywereup13%y-o-y, drivenbyJapanfollowedbySouthKoreaand Singapore.
Japan InvestmentVolume
Inthefirstquarterof2024,domestic real estateinvestment volume wasup178%q-o-q and45%y-o-ytoJPY1,704.6 billion(USD11.49 billion,up29%y-o-y).Thevolumehas recoveredtoalmosttheJPY1,705.1 billion recordedinthefirstquarterof2020,just beforetheCOVID-19pandemic.
Outlook
GlobalInvestmentVolume
Source: JLL
Japan InvestmentVolume
Source: JLL
Duetocontinuedhighinterestratesandconcernsabouteconomicrecession,therecoveryinglobalreal estateinvestmenthasbeenslowerthanexpected.However,Japan'srelativelyfavourable funding environment isexpectedtocontinuewithnorapidincreaseininterest ratesonthehorizon.Rentsand capitalvaluesare expectedtoincreaseduetorising consumerpricesandsteadyleasingdemand,andreal estatetransactionsareexpectedtoremainactive.Asoffice transactionshaverevived andthereisarich pipelineinvarious sectorsgoingforward,weforecast thatrealestateinvestmentvolumesinJapanforthe fullyear2024willbearoundJPY4.5trillion.
©2024 JonesLang LaSalleIP,Inc.Allrights reserved. 1 | Investment Market Summary
0 200 400 600 800 1,000 1,200 1,400 Asia Pacific EMEA Americas 1 Billion USD) 0 1,000 2,000 3,000 4,000 5,000 6,000 1Q 2Q 3Q 4Q （1 Billion JPY)
GlobalCityRankingbyInvestmentVolume
Regardingglobalcityranking byinvestment volume inthefirstquarterof2024,Tokyowas first withatotalinvestment volume ofUSD 7.65billion,upfromfifthplaceforthefullyear 2023.Osakawasin16thplaceatUSD1.84 billion,significantlyupfrom36thplaceforthe fullyear2023.
InboundInvestments
Inbound investment, whichisthepurchase volume ofrealestatebyoverseasinvestors, wasJPY177.3billioninthefirstquarterof 2024,down34%fromJPY268.7billioninthe sameperiodoflastyearbutasignificant recoverycomparedtoJPY45.1billioninthe previous quarter.
Theshareofinbound investment inthefirst quarterof2024was10%,downfrom23%in thepreviousquarterand17%forthefullyear 2023.
SectorAnalysis
Intermsofsector,theshareofoffice investmentinthefirstquarterof2024was51%, exceeding50%forthefirsttime infour quartersand significantlyupfrom33%forthe fullyear2023.Ontheotherhand,thehotel sectorsharewas6%,significantlydownfrom 14%forthefullyear2023.Theshareofretail was10%,logisticsfacilities22%,and multifamilyhousing9%,allofwhichwere downcomparedtothefullyearof2023.
GlobalCityRankingbyInvestmentVolume
Source: JLL
InboundInvestments
Source: JLL
SectorAnalysis
Source: JLL
©2024 JonesLang LaSalleIP,Inc.Allrights reserved. 2 | Investment Market Summary 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 Osaka Dallas/Fort Worth Boston Chicago Shanghai Washington, DC Seoul Los Angeles London New York Tokyo (1 Billion USD) Americas EMEA Asia Pacific 60% 65% 52% 53% 40% 43% 55% 52% 50% 52% 53% 40% 32% 47% 46% 33% 51% 14% 11% 25% 17% 18% 21% 18% 21% 16% 19% 18% 14% 8% 15% 13% 11% 10% 9% 7% 5% 6% 20% 16% 7% 8% 11% 6% 10% 19% 31% 19% 17% 26% 22% 5% 2% 4% 6% 5% 7% 7% 9% 11% 6% 9% 12% 5% 5% 9% 14% 6% 11% 10% 13% 17% 14% 12% 12% 9% 11% 16% 9% 13% 21% 11% 12% 13% 9% 0% 20% 40% 60% 80% 100% Office Retail Logistics Hotel Multifamily Other 27% 10% 17% 9% 18% 13% 17% 21% 21% 31% 16% 21% 34% 24% 26% 17% 10% 0% 5% 10% 15% 20% 25% 30% 35% 40% 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 1Q 2Q 3Q 4Q % of Overseas Activity （1 Billion USD）
LocationAnalysis
Regardinglocation,inthefirstquarterof2024, theshareofTokyoCBD(5-kus)was36%,up from28%inthefullyear2023.Ontheother hand,theshareofGreaterTokyo(excluding Tokyo), orChiba,SaitamaandKanagawa prefectures,was9%,downsignificantlyfrom 17%infull-year2023;andtheshareofGreater Osakawas16%,downslightlyfrom18%infull year2023.
LocationAnalysis
NotesandGlossary
DirectRealEstate
Source: JLL
Area
ExchangeRates
Directrealestateinvestmentreferstothepurchaseofindividualpropertyassetsoraportfolioofassets (orsharesinspecialpurposevehiclesthatownassets).
・ThedataincludestransactionsoverUS$5millionbutexcludesdevelopmentdealsandland transactions.
・Sectorscoveredareoffice,retail,hotels,industrial,residential,mixed-useand‘other’(includes nursinghomes,studentaccommodation,etc.).
ThedataincludespropertycompanyM&A,includingREITformations,wherethefollowing conditionsaremet:
-Thetransactionisessentiallyarealestatetransaction
-Significantassetsoverandabovetherealestateassets(e.g.,workforce,intellectualproperty, “goodwill”,etc.)arenottransferred
-70%+ofrevenuescomedirectlyfromrentalincome
-Transactionsinvolveasignificantchangeofownership
-Transactionmustbeat‘marketprice’
-OnlyincludesthepercentagesoldtonewinvestorsattheIPOprice
TokyoCBC(5-kus):Chiyoda-ku,Chuo-ku,Minato-ku,Shinjuku-ku,Shibuya-ku
GreaterTokyo:Tokyo,Chiba,Saitama,Kanagawa
GreaterNagoya:Aichi,Gifu,Mie
GreaterOsaka:Osaka,Hyogo,Kyoto,Nara
GreaterFukuoka:Fukuoka,Saga,Nagasaki,Kumamoto,Oita,Miyazaki,Kagoshima,Okinawa
TransactionvaluesareconvertedintoUS$attheaveragedailyrateforthequarterinwhichthe transactionoccurred.
©2024 JonesLang LaSalleIP,Inc.Allrights reserved. 3 | Investment Market Summary 43% 57% 57% 52% 42% 38% 46% 43% 39% 36% 46% 34% 29% 39% 40% 28% 36% 20% 18% 21% 20% 18% 17% 19% 16% 17% 20% 16% 17% 13% 14% 11% 18% 21% 11% 7% 8% 8% 14% 17% 13% 13% 13% 20% 13% 17% 25% 16% 23% 17% 9% 14% 11% 7% 9% 11% 15% 10% 15% 16% 15% 14% 18% 18% 20% 13% 18% 16% 3% 2% 3% 3% 4% 4% 5% 4% 4% 3% 3% 3% 4% 3% 5% 4% 9% 4% 2% 2% 5% 5% 5% 4% 3% 7% 3% 4% 3% 3% 2% 3% 7% 6% 0% 20% 40% 60% 80% 100% Tokyo CBD (5-ku) Tokyo (Excluding 5-ku) Greater Tokyo (Excluding Tokyo) Greater Osaka Greater Nagoya Greater Fukuoka Other
JonesLangLaSalleK.K.
TokyoHeadquarters KioiTower, Tokyo GardenTerraceKioicho
1-3Kioi-choChiyoda-ku, Tokyo 102-0094
+81343611800
FukuokaOffice
DaihakataBldg.
2-20-1Hakata-ekimae, Hakata-ku,Fukuoka-shi Fukuoka812-0011
+81922336801
OsakaOffice NipponLife
YodoyabashiBuilding
3-5-29KitahamaChuo-ku, Osaka541-0041
+81676628400
NagoyaOffice
JPTowerNagoya 1-1-1Meieki, Nakamura-ku,Nagoya-shi
Aichi450-6321
+81528563357
Contact
TakeshiAkagi HeadofResearch Research-Japan takeshi.akagi@jll.com
TomomiKemmochi Manager Research-Japan tomomi.kemmochi@jll.com
ManabuTaniguchi SeniorDirector Research-Japan manabu.taniguchi@jll.com
About JLL
Forover 200years, JLL (NYSE: JLL), aleadingglobalcommercial realestate andinvestment management company,has helped clientsbuy, build, occupy, manageandinvestin avariety ofcommercial,industrial, hotel, residential andretailproperties. A Fortune 500® companywith annual revenue of$20.8 billionandoperations inover 80countries around the world,our morethan 108,000 employees bringthe powerofaglobal platformcombinedwith localexpertise. Driven by our purpose toshape the future ofreal estate forabetter world, wehelp our clients,peopleand communities SEEA BRIGHTER WAYSM. JLL isthe brand name,anda registered trademark, ofJones LangLaSalle Incorporated. Forfurther information,visit jll.com
About JLL Research
JLL’s research teamdeliversintelligence,analysisandinsightthrough marketleadingreportsandservicesthatilluminatetoday’scommercialreal estatedynamicsandidentifytomorrow’schallengesandopportunities.Our morethan 550globalresearch professionalstrackandanalyzeeconomicand propertytrendsandforecastfuture conditionsinover60countries, producingunrivalledlocalandglobalperspectives.Ourresearch and expertise,fueledbyreal-timeinformationandinnovativethinkingaroundthe world,createsacompetitiveadvantageforourclientsanddrivessuccessful strategiesandoptimalrealestatedecisions.
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