CBRE: Strategy Shifts Keep Demand Strong for Japanese Real Estate

In CBRE's 2023 Asia Pacific Investor Intentions Survey, over 50% of investors, including overseas-based ones, foresee a 2023 interest rate hike by the BoJ in Japan.

Although commercial real estate transaction volume*1 declined by 20% y-o-y globally in 2022, investment volume in Japan remained largely unchanged, with only a 2% fall from the previous year. This resilience was largely due to the Bank of Japan (BoJ) maintaining its easy monetary policy, in contrast to most of the other major central banks pursuing a monetary tightening policy to counteract inflation.

Conducted in November 2022, CBRE’s 2023 Asia Pacific Investor Intentions Survey*2 found more than half of the investors active in the Japanese market (including overseas-based investors) expect the BoJ to raise interest rates in 2023.

Despite this assumption, the appetite for investment in Japanese real estate shows In CBRE's 2023 Asia Pacific Investor Intentions Survey, over 50% of investors, including overseas-based, foresee a 2023 interest rate hike by the BoJ in Japan.no signs of weakening. However, more investors expect prices for some asset types to decline due to higher interest rates, while other asset types are attracting stronger interest due to potential upside in cash flow.

It, therefore, appears that while many investors foresee interest rates rising, they plan to take the opportunity to calibrate their investment strategies based on the specific market situations of each asset type. Based on the findings of CBRE’s 2023 Asia Pacific Investor Intentions Survey, this report analyses the strategies investors intend to utilize in the Japanese real estate market this year and assesses the effects of a possible change in monetary policy by the BoJ.