Japan Real Estate Market Quarterly Review-First Quarter 2021

Financial Research Department Makoto Sakuma

Macro Economy

Japan’s real GDP contracted by 1.3% q-o-q (annualized 5.1%) in Q1 2021, posting negative growth for the first time in three quarters.
Japan’s real GDP is expected to expand by 3.7% in FY2021 and 1.7% in FY 2022.

Real Estate Market

Contraction in office markets started in Tokyo and spreading to other major cities.
Multifamily rents remained on the upward trend, but occupier activity easing in urban residential areas.
Hotels and retails are continuing to struggle due to prolonged COVID pandemic.
Major logistics markets remain robust and rents are remaining on an upward trend.

Capital Market

J-REIT Index increased by 12.8% q-o-q in Q1 2021, trading at price to NAV ratio at 1.1x, dividend yield at 3.6% and dividend and JGB spread at 3.5%.
J-REITs acquired property assets totaling JPY443 billion in Q1 2021 (6% 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.

Japan Real Estate Market Quarterly Review-First Quarter 2021

Makoto Sakuma

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