Japan Real Estate Report

Published 19 December 2014

  • 69 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
$1,295.00
Japan Real Estate Report

BMI View: Interest in Japan's commercial real estate market remains strong, particularly for office property. While a significant portion of investor interest centres on the capital, Tokyo, investors are increasingly looking for opportunities elsewhere. Japan is seen as a safe haven for investment, and is attracting attention from international firms and institutional investors alike, as well as domestic operators. The country has a mature real estate investment trust market.

With a focus on the three principal cities of Tokyo, Yokohama and Osaka, the Q1 2015 Japan Real Estate report covers the property fundamentals of the commercial real estate market rental market and examines the office, retail, industrial and construction segments throughout the country.

Japan's economy continues to struggle, and we expect growth to be slow over the next few years, despite the government's stimulus plans. The raising of the country's sales tax, for the first time in years, in April 2014, had a negative impact on demand across the economy, and in particular hit the retail industry. While we expect the impact of the tax to lessen over coming months, and believe that a planned second raise in late 2015 may not happen, the economy will remain on shaky ground. We see GDP growth coming in at 0.9% in 2014, falling to 0.8% in 2015 and an annual average of 0.7% over the rest of our forecast period to 2018.

The office sub-sector is seeing a significant amount of transactional activity, particularly in Tokyo, driven by the perception of Japan as a safe haven for investors and the fact that the economy continues to be one of the world's largest, as well as Tokyo's status as a hub of global finance and business. Demand is particularly strong for grade A space, a trend that we see continuing. We also see rising interest in Japanese office property from institutional investors from within Japan and internationally.

The retail sub-sector is one of the best performing in terms of Japanese...

BMI Industry View
7
SWOT
9
Political
11
Economic
12
Industry Forecast
13
Office
14
Table: Forecast Office Rental Rates, 2015-2016 (USD per sq m per month)
15
Table: Forecast Office Net Yields, 2011-2018 (%)
15
Retail
15
Table: Forecast Retail Rental Rates, 2015-2016 (USD per sq m per month)
16
Table: Forecast Retail Net Yields, 2011-2018 (%)
16
Industrial
17
Table: Forecast Industrial Rental Rates, 2015-2016 (USD per sq m per month)
17
Table: Forecast Industrial Net Yields, 2011-2018 (%)
18
Construction And Infrastructure Forecast Scenario
19
Table: Infrastructure And Construction Industry Data (Japan 2012-2017)
19
Table: Infrastructure And Construction Industry Data (Japan 2018-2023)
20
Macroeconomic Forecasts
28
Economic Analysis
28
Table: Economic Activity (Japan 2009-2018)
30
Industry Risk Reward Ratings
31
Asia - Risk/Reward Index
31
Table: Asia - Real Estate Risk/Reward Index
31
Japan - Risk/Reward Index
32
Rewards
32
Risks
32
Market Overview
34
Tokyo
37
Yokohama
37
Osaka
38
Office
38
Table: Historical Rental Rates, 2013-2014 (USD per square metre per month)
39
Table: Historical Net Yields, 2013-2014 (%)
39
Table: Terms Of Rental Contract/Leases, H114
40
Retail
41
Table: Historical Rental Rates, 2013-2014 (USD per square metre per month)
43
Table: Historical Net Yields, 2013-2014 (%)
43
Table: Terms Of Rental Contract/Leases, H114
44
Industrial
44
Table: Historical Rental Rates, 2013-2014 (USD per square metre per month)
46
Table: Historical Net Yields, 2013-2014 (%)
46
Table: Terms Of Rental Contract/Leases, H114
47
Competitive Landscape
48
REITs
48
Office
49
Retail
50
Industrial
50
Company Profile
52
Kajima Corporation
52
Kumagai Gumi
54
Obayashi Corporation
56
Shimizu Corporation
58
Demographic Forecast
60
Table: Population Headline Indicators (Japan 1990-2025)
61
Table: Key Population Ratios (Japan 1990-2025)
61
Table: Urban/Rural Population & Life Expectancy (Japan 1990-2025)
62
Table: Population By Age Group (Japan 1990-2025)
62
Table: Population By Age Group % (Japan 1990-2025)
63
Methodology
65
Industry Forecast Methodology
65
Sources
66
Risk/Reward Index Methodology
67
Table: Real Estate Risk/Reward Index Indicators
68
Table: Weighting Of Indicators
69

The Japan Real Estate Report features BMI Research's market assessment and independent forecasts of major construction projects in the residential and commercial markets, plus rental prices and yields in major cities. The report critically analyses the prospects for real estate within the broader economic and financial context - both domestic and global - via our econometrically-modelled and clearly explained banking and economic forecasts and follows this through to evaluate the implications for REITs.

BMI's Japan Real Estate Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the real estate industry in Japan.

Key Benefits

  • Benchmark BMI's independent real estate industry forecasts for Japan to test other views - a key input for successful budgeting and strategic business planning in the Japanese real estate market.
  • Target business opportunities and risks in Japan through our reviews of latest industry trends, regulatory changes and major deals, projects and investments.
  • Assess the activities, strategy and market position of your competitors, partners and clients via our company profiles (inc. SWOTs, KPIs and latest activity).

Coverage

BMI Industry View

Summary of BMI’s key industry forecasts, views and trend analysis covering real estate and construction, regulatory changes, major investments and projects and significant national and multinational company developments.

Industry SWOT Analysis

Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the real estate sector and within the broader political, financial, economic and business environment.

Industry Forecasts Outlook

Historic data series (2010-2013) and forecasts to end-2019 for the domestic real estate industry and for the local and global finance industry.

Indicators Include:

  • Real Estate: Office, retail and industrial real estate yields for all major cities (%); short term forecasts on minimum and maximum real estate rental prices by sub-sector (USD per square metre and local currency per square metre).
  • Construction: Industry value (USDbn); contribution to GDP (%); employment (‘000); real growth (%).
  • economy: Economic growth (%); nominal GDP (USDbn); unemployment (%); interest rates (%); exchange rate (against USD).

BMI’s Real Estate Risk Reward Index

BMI’s Risk Reward Indices provide investors (real estate vendors, construction companies and financial investors) looking for opportunities in the region with a clear country comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide an indices of highest to lowest appeal to investors, with each position explained.

Market Overview

Overview of the real estate sector, including analysis of existing/planned real estate developments and emerging industry trends in the office, industrial and commercial sectors

Market Analysis

Features detailed city-level data and analysis on rental prices, yields, contract terms and real estate availability with separate chapters covering the office, retail and industrial sub-sectors.

Company Profiles*

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.

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