New apartment supply to increase 31% next year, US$7 billion bet that Japan’s telework trend is short-lived, Nuveen and Kenedix acquire more apartment buildings in Tokyo, and 6% of Osaka’s restaurants shut amidst pandemic. Below is a quick weekly summary of some of the recent goings-on in the Japanese real estate market.

New apartment supply to increase 31% in 2021

The supply of brand new apartments across greater Tokyo is expected to increase by 31.1% in 2021 to 32,000 units, according to the Real Estate Economic Institute. A State of Emergency and the temporary closure of many sales offices saw supply drop 21.9% in 2020 as developers delayed sales. Next year, Saitama Prefecture is expected to see a 48.1% increase in supply, while Tokyo’s 23 wards may see a 30.8% increase. High-rises in central Tokyo and luxury apartments are expected to remain popular and retain high prices, while suburban developments close to train stations are also expected to see strong demand.

US$7 billion bet that Japanese workers return to the office

Canadian insurer Sun Life made headlines this week after Bloomberg reported that it plans to heavily invest in office properties in central business areas in Japan over the next few years. Up to $10 billion has been earmarked for real estate acquisitions in Japan, with 70% allocated to offices, as the insurer bets that business culture and cramped Japanese homes will see people return to the workplace. They’re not alone, with Tokyo topping worldwide commercial real estate sales volume between January and September of this year.

Nuveen and Kenedix acquire 7 apartment buildings

US investment manager Nuveen Real Estate and their Japanese asset manager partner Kenedix acquired seven apartment buildings with 428 apartments in central Tokyo for the equivalent of US$226 million. The partnership has focused on multifamily properties in Tokyo and Osaka that have good access to business districts, and offer resilience and growth potential. Their portfolio now comprises 35 residential buildings with 1,940 units, valued at US$810 million.

6% of Osaka’s restaurants have closed since pandemic

3,533 restaurants have closed in Osaka City since the onset of the pandemic. The number of closures between April and November was up 30% from the same period in 2019. Kita Ward, which includes Kitashinchi and Umeda, saw 2.2 times as many restaurant closures this year. With residents asked to refrain from holding end-of-year and new-year parties and gatherings, closures are expected to continue into next year. Osaka City had approximately 59,000 restaurants as of late March 2020.

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