Commercial Investment Real Estate Winter 2020 | Page 12

WORLDVIEW:
JAPAN
Booming Metro Activity
$14.78 billion
Tokyo’s CRE sales volume through 3Q2019,
making it Asia's most active metro area.
Top 3 Sectors in Tokyo
Office
$1.83 billion
Multifamily
$770 million
Hotel
$110 million
Cross-Border Investment Sources
$550 million
$1.11 billion
$430 million
Tokyo Price Points (Per SF)
RETAIL
OFFICE
INDUSTRIAL
UNITED STATES
HONG KONG
$1,505.21
$994.29
$185.40
Tokyo Cap Rates
Industrial
Office
5.1 %
3.9 %
3.5 %
Retail
SOUTH KOREA
Data provided by Real Capital Analytics
W
hile the Japanese economy con-
tinues its modest growth, with
a 0.4 percent bump in gross do-
mestic product for 3Q2019, the real estate
market took a step back in the latter half of
last year. Overall volume through the first
nine months of 2019 totaled $24.3 billion,
a 6 percent drop in year-over-year numbers,
10
COMMERCIAL INVESTMENT REAL ESTATE MAGAZINE
according to Real Capital Analytics. More
troubling, the total volume for that quarter
was down 26 percent, to $5.3 billion.
Despite global uncertainty related to
tariffs and trade negotiations, Tokyo proved
to be a bright spot for Japan. The massive
metro market edged out Hong Kong in ac-
tivity through 3Q2019, thanks in part to the
ongoing political instability in China’s special
administrative region.
Despite expected quantitative easing in
2020, Japan’s sluggish economic growth has
not diminished the relative appeal of overall
returns from real assets. Urban investment,
barring international political or economic
disruption, should continue to be a strength.
WINTER 2020