Office Transactions Led Tokyo’s Real Estate Asset Sales In 2021
Logistics and retail asset transactions were also up during the year
February 15, 2022 – Office building transactions drove the total real estate sales volume growth last year to 3.9 billion yen (US$33 billion), data from the latest Nikkei Real Estate Market Report showed.
The number of transactions in 2021 hit 1,427. This is the third consecutive year of increase, according to the report.
The biggest driver of this year’s increase had been a rise in asset sales by business companies.
Companies sought to secure cash to cope with the rapid deterioration of the business environment and this matched the needs of developers and funds whose investment appetite had increased against a backdrop of global monetary easing, Nikkei said in its report.
Office assets dominated the transactions, hitting 1.55 billion yen (US$13 billion). This is a 21% increase from 2020’s office sales volume.
The largest deal was the sale of Dentsu Headquarters Building, which changed hands at 270 billion yen (US$2.3 billion) including that of the adjacent Shiodome Annex Building. JTB, a travel agency, also sold its Tokyo Head Office and Osaka Base Building for approximately 30 billion yen (US$250 million).
In other sectors, transaction volume also rose. Logistics facility transactions reached 859 billion yen (US$7.3 billion), up 3% year-on-year. Notably, retail building sales climbed from a low base and increased 59% year- on-year to 377.7 billion yen (US$3.2 billion). This is about the same level as that in 2019.
Nikkei also noted active asset replacements by real estate investment trusts (REITs). Nikkei’s data showed that the amount of property acquisitions by listed REITs was 1,412.7 billion yen (US$12 billion), which is almost the same as that for the previous year. On the other hand, the sales amount doubled from the previous year to 500.8 billion yen (US$4.2 billion), exceeding the previous record high of 465 billion yen (US$3.9 billion) in 2017.
“Taking advantage of the current situation in which the investment appetite of foreign investors and private funds is robust, the REIT sold old properties with the intent to rejuvenate its portfolio,” Nikkei said in its report.