Due to the ongoing economic recession and impact of natural disasters, Japan’s real estate market has experienced prolonged sluggishness. However, the domestic economy exhibited signs of bottoming out in 2012, and Tokyo prime office rents increased for the first time in four years during 2Q12.
Japan’s commercial real estate transaction volumes also recovered in 2012 from its decline in 2011 (though full-year transaction volumes only amounted to about 20 percent of the peak recorded in 2007).
One notable transaction in 2012 was the sale of 15 logistics facilities located across Japan. Purchased by a joint venture between Global Logistic Properties (GLP) and China Investment Corporation (CIC), the portfolio had a sales price of JPY 123 billion (equivalent to USD 1.6 billion at the time).
This transaction supported the recognition that modern logistic facilities, which have become increasingly rare, represents confidence in Japan’s huge distribution field, which is ranked highly among the economic powers of the world.
In addition, the growing amount of online commerce in Japan is expected to boost the country’s existing distribution volumes.
Following this transaction, a number of investment funds targeting Japanese real estate were formed by domestic capital and overseas investments from Asia, the United States and Europe. I