Japanese Property Market Quarterly Review,First Quarter 2013 －Grade-A Office Rents Surge in Tokyo－
金融研究部 不動産市場調査室長 竹内 一雅
- Business confidence has improved considerably with the Japanese yen depreciation and the equity market rally since the inception of the second Abe cabinet. NLI Research Institute revised its Japan GDP growth forecast up to 2.5% for 2013. Housing starts increased for the sixth consecutive month in February, and secondary housing transactions continued to increase in the seventh consecutive month in the Tokyo metropolitan area. The land prices in the three major metropolitan areas shrank at milder paces than previous years and appear to be bottoming out since Nagoya residential land prices did not decline.
- The office rents in the Tokyo three wards finally recovered, while the Tokyo grade-A office rents soared in the second consecutive quarter and some smaller categories recovered to the level before the earthquake in the 2011. It seems the Tokyo office market will continue to recover since most of the supply scheduled in 2013, which is equivalent to only 33% of that in 2012, has already been completed. Hotel occupancy rates remained as high as those before the global financial crisis in 2008. Large logistics facilities have still been in short supply.
- The TSE REIT Index skyrocketed by 47.4% q-o-q in the first quarter. J-REITs acquired sizable assets totaling JPY 861 billion in the quarter, which is already larger than the annual number in 2012, while two J-REITs, Comforia Residential and Japan Prologis went public. The property investment market appears to be further improving on the back of the Japanese yen depreciation, the recovering equity market and the Tokyo office rent recovery.