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Japan’s Property Market Conditions Seen Recovering in Second Half of 2021

Office building constructions still on the rise

June 23, 2021 – The real estate market in Japan is forecasted to return to a “recovery path” towards the second half of this year, a study published in Nikkei Real Estate Market Report said.

According to a real estate market forecast report prepared by TMAX, the projected improvement in market conditions towards the end of the year will be led by rental residences and logistics facilities. 

The deterioration in the first half was primarily attributed to factors such as the second state of emergency declared in January 2021, resulting from the rapid increase in the number of people infected with the coronavirus (Covid-19). 

The report said leased residences are becoming increasingly popular among investors as an asset with relatively stable revenue. Logistics facilities, on the other hand, enjoy the benefits of the expansion of online shopping. 

Office and retail facilities, meanwhile, are also expected to see some improvement, but uncertainty remains due to the unpredictability caused by Covid-19.

Post-2021, however, Japan’s property sector outlook remains generally optimistic with multiple ongoing developmental projects 

Nikkei Real Estate Market Report reported that a total of 99 large-scale office buildings, each with a gross floor area of at least 10,000 square metres, are expected to be completed in the 23 wards of Tokyo in or after 2021.