3. Preferred Sectors
When asked which property sectors were the top three preferable investment targets in terms of price appreciation and market growth, "Hotel" ranked first for the third consecutive year, selected by 60.6% of respondents (Chart-4), which, however, was 20% less than last year (Chart-5). "Hotel" is still regarded as a promising sector and many new projects are actively developed. However, the pace of foreign visitor increase has slowed recently and the number of hotel stays in Japan has been shrinking y-o-y almost every month. In addition, private accommodation units operated with Airbnb and others have grabbed some market share from hotels.
Besides the slowing growth of foreign visitors, consumption per visitor during stays in Japan declined significantly
2. This has brought a noticeable reduction in sales of luxury goods at department stores and retail malls. Thus, "Urban retail" declined to 20.5%.
"Healthcare property" or "Logistics facility" remained at high ranks, selected by 39.4% and 37.8% of respondents, respectively. Even though healthcare properties are difficult to invest in due to the small size of individual assets, and the logistics market is suffering from the recent supply glut, both sectors have been regarded as high growth markets for the medium to long term.
"Overseas property" rose noticeably to 34.6%. In addition to growth opportunities in Asia, many investors have become interested in the U.S. in order to capitalize on Trump’s America first policy.
"Infrastructure" also ranked high, selected by 39.4% of respondents. Several privatization cases of local airports have been progressing, thus the Japanese infrastructure investment market has become diversified from the solar panel-oriented market. In the current low property yield conditions, many investors have become interested in infrastructure investment.