Salter Brothers Research: Japan Real Estate
September 2024
Salter Brothers is embarking upon a Japan investment strategy. As part of our commitment to communicating with our investors, Salter Brothers Research shares highlights from their market study.
An Active Market
The 4th largest commercial real estate market in the world, and the 5th largest recipient of global cross-border investment in 2023, Japan offers an active and accommodating environment for foreign investors.
A Diverse Opportunity
Average quarterly volume over the last five years has exceeded US$1 billion in all sectors. Long-term returns have also been strong, exceeding 5% per annum on average across all sectors over the last 15 years.
An Ideal Moment?
Abundant investment has been supported by a favourable macroeconomic environment, with low interest rates and an historically weak yen providing an ideal opportunity. Conditions should continue to remain favourable in the near term despite changes in Japan’s monetary policy.
Oncoming Headwinds
Japan’s population is aging and in decline, forecast to fall 20 million by 2050. Urban centres should remain attractive, with the burden of decline expected to be more keenly felt in the regions.
Sector Spotlight: Hotels
Hotels have delivered the best returns of any sector since 2021, attracting record investment in 2023Q3 and 2024Q2. Despite opening its borders relatively late, Japan is on track to break its 2019 tourist record in 2024.