Based on a new report by CBRE, total commercial real estate investment volume in Japan grew by 3% year-over-year to reach JPY 749.0 billion in Q2 2023, slightly above the average Q2 figure over the past five years.
Logistics sector recorded the largest Q2 volume on the back of several major transactions including a portfolio, which changed hands for a sum in excess of JPY 100 billion. Residential investment volume registered a y-o-y increase for the fourth consecutive quarter, underpinned by strong purchasing by Asian investors.
Tokyo expected yields for major asset types fell in all sectors other than office, which remained unchanged. Hotels (management contract) recorded a 10 bps q-o-q decline in expected yields, bringing them within 10 bps of Q4 2019 levels.
Meanwhile, the percentage of investors who indicated that expected yields for Tokyo offices and logistics facilities should rise over the next 12 months increased from a year ago. Fewer investors are willing to meet sellers' asking prices, as the scope for upside in cash flow is seen to become more limited.