Japan Real Estate Market Quarterly Review-First Quarter 2025

Financial Research Department Economic Research Department Researcher Hiroto Iwasa

■Summary

Macro Economy

In Q1 2025, Japan’s real GDP is expected to decrease by 0.2% q-o-q (annualized 0.9% decrease), as a surge in imports dragged down net exports.
Japan’s real GDP is expected to expand by 1.1% in FY2025, and 1.2% in FY2026.

Real Estate Market

Tokyo office rents are rising faster, signaling recovery; other major cities also remain on a recovery path.
In Tokyo 23-ku, multifamily rents gaining upward momentum, supported by rising sale prices and wage growth.
In the retail sector, domestic demand remains subdued and inbound spending is slowing due to a stronger yen and global concerns.
Vacancy trends in logistics markets are diverging between Tokyo and Osaka.
Hotel stays up on inbound demand, but high rates limit domestic travel.

Capital Market

J-REITs gained on buying interest driven by perceived undervaluation.
J-REITs acquired property assets totaling JPY380 billion in Q1 2025 (-25% 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.