Real estate transaction volume for the second half of 2022 was 2.1 trillion Yen (approx. US$15.7 billion), according to the Japan Real Estate Institute. This was a 25% drop from the second half of 2021.
The 436 billion Yen sale of a partial share in Otemachi Place in December to a consortium led by Tosei Asset Advisors was a single major contributor to the sales volume. This was the largest single real estate transaction in Japan’s history.
Offices still made up the bulk of the transaction total, but demand picked up for logistics and hotels, as investors see continued growth in the e-commerce sector and are also anticipating a recovery in inbound tourism.
In the first half of 2007, during the peak of the last real estate bubble, transaction volume reached a record 3 trillion Yen. By the second half of 2008, it had dropped to just 1 trillion Yen. Since the introduction of monetary easing measures in early 2013, half-yearly volumes have maintained an average of around 2 trillion Yen.
Up until 2021, JREITs had dominated the market. Known for buying more than they sell, their activity balanced demand and supply. In 2022 this shifted, with JREIT volume decreasing. Meanwhile, special purpose companies and asset managers began to fill the gap.
Acquisitions by foreign institutions reached 1.1 trillion Yen in the first half of 2022, the highest level on record. With rising interest rates outside of Japan, acquisitions dropped by more than half to around 450 billion Yen in the second half of the year.
The Institute’s data is based on official acquisition announcements by JREITs and listed companies.
Source: Japan Real Estate Institute, April 12, 2023.
