Japan Real Estate Market Quarterly Review-Second Quarter 2021

Financial Research Department Watanabe Fumiko

Summary

Macro Economy

Japan’s real GDP is expected to grow by 0.4% q-o-q (annualized 1.5%) in Q2 2021, likely to avoid entering a technical recession.
Japan’s real GDP is expected to expand by 3.5% in FY2021 and 1.9% in FY 2022.

Real Estate Market

Tokyo Grade-A office rents are hovering from Q4 2020 to Q2 2021, after declining to the same level of Q4 2017.
Multifamily rental growth flattened in Tokyo as net migration slowed.
Hotels and retails are continuing to struggle due to resurgence of COVID infections and renewed state of emergency.
In major logistics markets, supply-demand balance remain robust.

Capital Market

J-REIT Index increased by 6.8% q-o-q in Q2 2021, trading at price to NAV ratio at 1.17x, dividend yield at 3.3% and dividend and JGB spread at 3.3%.
J-REITs acquired property assets totaling JPY230 billion in Q2 2021 (5% decrease y-o-y).

This report includes data from various sources and NLI Research Institute does not guarantee the accuracy and reliability. In addition, this report is intended only for providing information, and the opinions and forecasts are not intended to make or break any contracts.