Japan's Commercial Real Estate Market Sees Mixed Q2 2024 Results
Commercial real estate transaction volume decreased by 25% year-over-year, but hotel transactions and office acquisitions saw significant increases
Commercial Real EstateJapan Real Estate MarketHotel TransactionsOffice AcquisitionsCbreReal Estate NewsAug 07, 2024
Significant hotel transactions boosted the sector's acquisition volume to JPY 280.0 billion, which is about 2.6 times the volume recorded in the same quarter the previous year and accounted for approximately 40% of the total transaction volume for the quarter. This surge in hotel transactions also contributed to a 49% year-over-year increase in the cumulative transaction volume for the hotel sector in H1 2024.
In contrast, office transactions also saw a notable increase, with a 47% year-over-year rise to JPY 180.0 billion. Conversely, the investment volume for the retail, residential, and logistics sectors declined.
CBRE noted that J-REIT acquisition volume for the quarter (including all transactions below JPY 1 billion) dropped by 22% year-over-year to JPY 169.8 billion. This also marked a significant decline from the January-March quarter, which saw several major J-REIT transactions. Over half of the J-REIT transaction volume this quarter was in the hotel sector.
Despite the TSE REIT Index declining since the beginning of the year, hotel REITs posted positive returns. According to the results of this quarter's CBRE Cap Rate Survey, expected yields for Tokyo prime assets across all sectors either fell or remained unchanged.
Frequently Asked Questions
What was the overall commercial real estate transaction volume in Japan in Q2 2024?
JPY 663.0 billion
Which sector saw a significant increase in transaction volume in Q2 2024?
Hotel transactions
What was the year-over-year increase in cumulative transaction volume for the hotel sector in H1 2024?
49%
What was the J-REIT acquisition volume for Q2 2024?
JPY 169.8 billion
According to the CBRE Cap Rate Survey, what was the trend in expected yields for Tokyo prime assets across all sectors?
Expected yields either fell or remained unchanged.
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