A rebound in Japan’s real estate market over the past year is driving offshore investors and investment trusts to take on more risk by buying older office buildings built during the boom of the 1980s and properties far from Tokyo’s prime commercial districts.
The result has been a marked increase in deals in markets like Fukuoka, Japan’s seventh-largest city, where foreign investors have bought four office buildings and retail properties this year compared to only one deal in the previous two years.
Japan’s publicly traded real estate trusts have also raised $4.9 billion by selling shares so far this year, almost three times more than the same period last year, according to Thomson Reuters data.
“As the markets become active and investor expectations for Japan’s property market increase, investors are becoming more willing to take risks,” said Takashi Akagi, head of research at property consultants Jones Lang LaSalle Tokyo. “We are in that phase now. Their investment targets do not have to be prime offices in Tokyo.”
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.