The economic sentiment has continued to improve even amidst global uncertainties. Although household income has not yet increased, private consumption is driving the economic recovery. The numbers in the housing market have shown excellent positive y-o-y growth. Land prices in the major metropolitan areas posted positive y-o-y growth for the first time since 2008.
The Tokyo office market has come to a standstill after the significant improvement in the first quarter, which, however, seems to have not affected the rent recovery trend.
The Tokyo residential rents seem to have entered a recovery phase following the rising condominium prices. Parts of the retail sector have shown a recovery. The hotel sector has been performing well and the logistics sector has been facing a tight supply-demand balance.
The TSE REIT Index performed strongly following the announcement of winning the bid to the 2020 Tokyo Olympic Games, turning out a +8.1% q-o-q return.
The optimistic sentiment has already dominated the investment market followed by rent recovery in all rental markets. It seems investors have to acquire assets at higher prices before the transaction volume increases further.
