Asian Real Estate Market: Japanese land prices on the rise

World
Europe

02:23

Global appetite for investment in commercial real state remains strong, particularly in the Asia-Pacific. Average land prices in Japan grew for the first time in 27 years as growing tourist traffic fed demand for new shops and hotels, signaling that the country is one step closer to escaping decades of deflation. Terry Terashima has the story.

Asia has seen a strong increase in commercial real estate investments in recent years, both as a source of capital and as an investment destination, contributing to an 18 percent year-on-year rise in the global property market.

DARREN XIA JLL "Looking into 2018 Asia Pacific is experiencing very healthy transactions. In 2018 to date, 3rd quarter we have seen 120 billion US dollars of transactions in commercial real estate, that is in line with the peak in 2017. The total year of 180 billion US dollars."

There is a strong investment interest in cities like Sydney, Singapore, Hong Kong and Tokyo.

DARREN XIA JLL "Now if I put these major cities and looked at the cost of capital and their yield Tokyo today is showing the highest yield spread amongst these cities. So if I was an international investor today, looking into parking capital in Asia Pacific, Tokyo will be one of my top picks."

The Japanese investment market has seen a steady expansion reaching 3 trillion this year. In October it is said to have increased by 4 percent compared to the same period in the previous year.

TERRENCE TERASHIMA TOKYO "Experts say the Japanese property market will remain attractive for both foreign and domestic investors, but the question is how stable will it remain in the coming years."

TAKESHI AKAGI JLL "Current issue or problem in the investment market is lack of available assets in the sales market. So to reach those information or an opportunity, the overseas investor has a kind of disadvantage in the real estate market."

However, experts say, they are seeing a gradual increase in sales assets, and the Japanese property market is expected to remain stable. Overseas investors will be able to find future opportunity in the investment market. Terrence Terashima, CGTN Tokyo.