Investment Market Summary
Japan Capital Flow
2Q 2024
Japan market remains active despite rising interest rates
Global Investment Volume
Global real estate investment volumes fell 4% y-o-y in the first half 2024 to USD 287 billion. Transactions in the Americas were down 10% y-o-y, in EMEA (Europe, the Middle East and Africa) up 1% y-o-y, and in Asia-Pacific up 7% y-o-y. Japan was the most active market in Asia Pacific with overseas investors focusing on hotel assets on the back of a weak yen and growing international tourism.
Japan Investment Volume
In the second quarter 2024, domestic real estate investment volume was down 47% q-oq and 8% y-o-y to JPY 905.9 billion (USD 5.81 billion, down 18% y-o-y) Investment volume in the first half 2024 totalled JPY 2,610.5 billion, increasing 21% y-o-y
Outlook
Global Investment Volume
Source: JLL
Japan Investment Volume
Source: JLL
The global real estate investment market is seeing signs of a recovery in investment volumes, taking into account a decline in prices due to rising interest rates. In Japan, on the other hand, although interest rates are rising, the funding environment is not expected to worsen due to a sharp rise in interest rates, therefore, we expect the investment market to remain active. Particularly, hotels with remarkably improving profitability and multifamily residential with continuing rent rises are attracting attention. Considering the strong pipeline in 2024, we expect that real estate investment volumes in Japan for full year 2024 will be around JPY 4.5 trillion.
Global City Ranking by Investment Volume
In the first half 2024, by global city investment ranking, Tokyo was first with total investment volume of USD 11 02 billion, keeping the top position from 1Q24. Osaka was in 18th place at USD 3 63 billion, falling slightly from 16th place in 1Q24, but remaining within the top 20.
Inbound Investments
Inbound investment, which is the purchase volume of real estate by overseas investors, was JPY 297 8 billion in the first half 2024, down 42% from JPY 513.0 billion in the same period last year
The share of inbound investment in the first half 2024 was 11%, down from 24% in the same period last year and 17% for full year 2023.
Sector Analysis
The share of office investment in the first half 2024 was 44%, expanding from 33% for full year 2023 The logistics facilities share was 15%, significantly down from 26% for full year 2023. The share of hotel and multifamily housing increased slightly to 16% and 15%, respectively, whilst the share of retail decreased slightly to 8%.
Global City Ranking by Investment Volume
Source: JLL
Inbound Investments
Source: JLL
Sector Analysis
Source: JLL
Location Analysis
In the first half 2024, the share of Tokyo CBD (5-kus) was 34%, up from 28% in full year 2023. The share of Greater Tokyo (excluding Tokyo), or Chiba, Saitama and Kanagawa prefectures, was 8%, down significantly from 17% in full year 2023. The share of Greater Osaka was 21%, the highest since JLL started tracking in 2008.
Location Analysis
Notes and Glossary
Direct Real Estate
Source: JLL
Area
Exchange Rates
Direct real estate investment refers to the purchase of individual property assets or a portfolio of assets (or shares in special purpose vehicles that own assets)
・The data includes transactions over US$5 million but excludes development deals and land transactions
Sectors covered are office, retail, hotels, industrial, residential, mixed-use and ‘other’ (includes nursing homes, student accommodation, etc.).
・The data includes property company M&A, including REIT formations, where the following conditions are met:
- The transaction is essentially a real estate transaction
- Significant assets over and above the real estate assets (e g , workforce, intellectual property, “goodwill”, etc ) are not transferred
- 70% + of revenues come directly from rental income
- Transactions involve a significant change of ownership
- Transaction must be at ‘market price’
- Only includes the percentage sold to new investors at the IPO price
Tokyo CBC (5-kus): Chiyoda-ku, Chuo-ku, Minato-ku, Shinjuku-ku, Shibuya-ku
Greater Tokyo: Tokyo, Chiba, Saitama, Kanagawa
Greater Nagoya: Aichi, Gifu, Mie
Greater Osaka: Osaka, Hyogo, Kyoto, Nara
Greater Fukuoka: Fukuoka, Saga, Nagasaki, Kumamoto, Oita, Miyazaki, Kagoshima , Okinawa
Transaction values are converted into US$ at the average daily rate for the quarter in which the transaction occurred.
jll.com
Jones Lang LaSalle K.K.
Tokyo Headquarters Kioi Tower, Tokyo Garden Terrace Kioicho 1-3 Kioi-cho Chiyoda-ku, Tokyo 102-0094
+81 3 4361 1800
Fukuoka Office
Daihakata Bldg. 2-20-1 Hakata-ekimae, Hakata-ku, Fukuoka-shi Fukuoka 812-0011
+81 92 233 6801
Osaka Office Nippon Life
Yodoyabashi Building 3-5-29 Kitahama Chuo-ku, Osaka 541-0041
+81 6 7662 8400
Nagoya Office
JP Tower Nagoya 1-1-1 Meieki, Nakamura-ku, Nagoya-shi
Aichi 450-6321 +81 52 856 3357
Contact
Takeshi Akagi Head of Research Research - Japan takeshi.akagi@jll.com
Tomomi Kemmochi Manager Research - Japan tomomi.kemmochi@jll.com
Manabu Taniguchi Senior Director Research - Japan manabu.taniguchi@jll.com
About JLL
For over 200 years, JLL (NYSE: JLL), a leading global commercial real estate and investment management company, has helped clients buy, build, occupy, manage and invest in a variety of commercial, industrial, hotel, residential and retail properties A Fortune 500® company with annual revenue of $20 8 billion and operations in over 80 countries around the world, our more than 110,000 employees bring the power of a global platform combined with local expertise Driven by our purpose to shape the future of real estate for a better world, we help our clients, people and communities SEE A BRIGHTER WAYSM JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated For further information, visitjll com
About JLL Research
JLL’s research team delivers intelligence, analysis and insight through marketleading reports and services that illuminate today’s commercial real estate dynamics and identify tomorrow’s challenges and opportunities Our more than 550 global research professionals track and analyze economic and property trends and forecast future conditions in over 60 countries, producing unrivalled local and global perspectives Our research and expertise, fueled by real-time information and innovative thinking around the world, creates a competitive advantage for our clients and drives successful strategies and optimal real estate decisions
