No decline in investment appetite for Japanese real estate

Hiroshi Okubo, Executive Director Head of Research Japan at CBRE
(Hiroshi Okubo, Executive Director Head of Research Japan at CBRE)

Appetite for Japanese real estate will remain strong this year despite expectations that interest rates will go up, according to CBRE’s 2023 Asia Pacific Investor Intentions Survey.

Conducted in November 2022, the report focuses primarily on the answers given by Japan-focused investors including both Japanese and overseas investors. 52% of investors indicate that they expect their acquisition volume in 2023 to exceed that of 2022. When combined with respondents who answered “the same as last year,” the overall share of investors planning to buy the same or more this year remains high at 89%. 

However, more investors expect prices for some asset types to decline as a result of rising interest rates, while other asset types are attracting stronger interest due to potential upside in cashflow. While many investors foresee higher interest rates, they intend to take the opportunity to calibrate their investment strategies based on the specific market situations of each asset type.

While “core” remains the most popular investment strategy, this approach fell slightly compared to last year. In contrast, “opportunistic” showed a significant surge, being selected by twice as many investors as in 2022 and emerging as the second most preferred strategy (compared to fourth place last year, behind core, value-added, and core-plus).