Japan real estate investment set to hit record for second year

[TOKYO] Japan’s real estate investment is likely to reach a record for a second straight year, after demand for offices fuelled transactions in the first half, according to Jones Lang LaSalle. 

Investment volume is forecast to climb to seven trillion yen (US$44 billion) this year, as companies relocate offices and sell real estate to pursue asset-light strategies, JLL said in a report on Thursday (Aug 20).

Property investment jumped to a record 3.8 trillion yen in the January-June period, it said. 

Foreign investors accounted for 30 per cent of investment in the first half, as they sought to generate high returns by adding value to properties, according to the report. High occupancy rates and rental growth are spurring returns, it said. 

Japan is seeing unprecedented property deals, as companies seek to offload assets to boost efficiency. Rising interest rates have yet to dissuade investors as inflation returns to the economy. 

KKR and Blackstone are among bidders for broadcaster Fuji Media Holdings’ real estate business, with some offers exceeding one trillion yen, people with knowledge of the matter said in June.

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KKR and PAG last year agreed to buy real estate assets of Sapporo Breweries in a deal worth about US$3 billion. 

Tokyo ranked second among global cities for real estate investment in the first half, climbing up one spot from a year earlier and only trailing Singapore, JLL said.  BLOOMBERG