“It is a golden period of Japanese real estate,” Henry Chin, head of Asia-Pacific research at CBRE, told CNBC.
Considering Japan's current weak yen and its ultra-loose monetary policy/ favorable lending terms, now might be the time to invest in Japan property.
Let’s take a look some real estate purchases in Japan, by foreign investors. And why they decided to purchase properties at this period of time.
Singapore - City Developments Limited (CDL) [1]
City Developments Limited (CDL) has purchased 35 billion yen (S$321 million) worth of interest in a portfolio of 25 residential assets in Tokyo from BentallGreenOak (BGO) affiliates.
This marks CDL's entry into Tokyo’s rental housing sector, and its largest private rented sector (PRS) transaction in Japan to date.
CDL said, it is now well-positioned to benefit from higher demand from accommodation. It expects demand to be fuelled by a recovering economy, rising wages and a post-pandemic resurgence in net migration into Tokyo.
“Japan’s favourable interest-rate environment presents a timely and strategic opportunity for the group to expand our residential rental portfolio ..."
The group’s Japan residential portfolio has “remained resilient” despite economic volatility over the past few years, given its stable rental growth and occupancy of over 95%.
Chinese investors [2]
'...The recent sharp decline in the value of the yen has made Japanese properties relatively cheap," a businessperson said.
In the Kansai region, which includes Osaka and Kyoto, Chinese buyers are especially keen on what in Japan are assumed as lower-end real estate products, according to a referral agent. These buyers are focusing on a certain residential area of central Osaka where deals are cheaper than in other areas despite the convenient location. While Japanese investors may be reluctant to buy properties in the area, "Chinese buyers are making snap decisions," the referral agent said.
In many cases, the houses are renovated and listed on minpaku platforms, yielding good returns.
Singapore’s sovereign wealth fund GIC [3]
Singapore’s sovereign wealth fund GIC’s purchase of six warehouses in Japan from Blackstone for US$800 million contributed significantly to that, said Christine Li, Knight Frank’s head of Asia-Pacific research.
GIC chief investment officer Jeffrey Jaensubhakij recently described Japan as a “very cheap” market where value can be realised, and with a long way to run.
If you would like to find out more about investing in Japan properties, here is a guide to download.