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Research Japan H1 2026

Investment Market Dynamics

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Japan: Investment Market Dynamics

Key trends

2 2

Global Investment Volumes Continue to Expand Global real estate investment volume is showing

an upward trend. Although geopolitical conflict and the potential for higher interest rates remain on investors’ minds, the impact on the real estate investment market is expected to remain limited going forward, as investors increasingly view volatility as structural rather than episodic. Japan Investment Volume Reaches Record High In H1 2026, Japan investment volume reached JPY 3,751.7 billion, setting a new record following H1 2025. During 2Q26, office building transactions were observed not only in Tokyo CBD but also in other areas within Tokyo, along with a large-scale data center transaction.

Investment Expansion Driven by Rising Returns Rising investment returns across commercial real estate, driven by high occupancy rates and rental growth, are fueling investment expansion. Medium- to long-term rental growth expectations are increasing due to supply constraints and CPI-linked rent adoption, and expected to offset the negative impact of rising interest rates. Outlook In addition to robust investment demand, corporate activities such as real estate sales accompanying office relocations and asset-light strategies are being observed, and investment opportunities are expected to continue increasing. Full-year 2026 real estate investment volume is forecast to reach a record high of JPY 7 trillion.

By the numbers (H1 2026)

+ 27% y-o-y Global investment volume

2nd

Tokyo’s ranking by investment volume

+ 17% y-o-y Japan Investment volume

30% Inbound investment share in Japan

45% Office investment share in Japan

Japan: Investment Market Dynamics

Historical global investment volume

(1 Billion USD)

Global investment volume •

•

Global real estate investment volume in H1 2026 reached USD 465.5 billion, representing a 27% increase y-o-y. Investment volumes increased across all regions: Americas, EMEA, and Asia Pacific. Transactions in the Americas rose 30% y-o-y, driven primarily by the United States, while EMEA increased 15% and Asia Pacific grew 35%. Investment activity is accelerating globally, supported by expanding leasing demand for offices and logistics facilities. Although geopolitical conflict and the potential for higher interest rates remain on investors’ minds, the impact on the real estate investment market is expected to remain limited going forward, as investors increasingly view volatility as structural rather than episodic.

1,400 1,200 1,000 800

+27%

600 400 200 0

Asia Pacific

EMEA

Americas

Source: JLL

Japan: Investment Market Dynamics

Global city ranking by investment volume

Global city ranking •

•

In the global city rankings for H1 2026, Tokyo ranked second with USD 16.8 billion, moving up from third place in Q1 2026. Singapore's investment volume increased significantly in Q1 2026 and remained in first place for H1 2026.

Singapore Tokyo New York City Washington, DC Los Angeles London Chicago

America EMEA Asia Pacific

Atlanta Seoul Sydney 0

(1 Billion USD) Source: JLL

Japan: Investment Market Dynamics

Historical Japan investment volume (1 Billion JPY)

Japan investment volume •

•

Japan’s investment volume in H1 2026 reached JPY 3,751.7 billion, a 17% increase y-o-y. Building on the record set in 2025, this marked a new record high for first-half investment volume. Q2 2026 totaled JPY 1,676.5 billion, surpassing the previous Q2 record of JPY 1,502.4 billion set in 2007. Strong acquisition appetite from investors and a steady supply of properties for sale continue to drive robust market activity. During this period, office building transactions were observed not only in Tokyo CBD but also in other areas within Tokyo, along with a large-scale data center transaction exceeding JPY 150 billion.

8,000

+13% 6,000

+17% 4,000

2,000

Source: JLL

Japan: Investment Market Dynamics

Historical inbound investment volume (1 Billion JPY)

Inbound investments

2,500

40%

•

Investment volume by overseas investors in H1 2026 totaled JPY 1,110.5 billion, remaining nearly flat y-o-y at 1% increase. The share of inbound investment in Japan's real estate in H1 2026 was 30%, maintaining the high level that continued from full-year 2025. Overseas investors' appetite for Japanese real estate remains strong, with value-add strategies targeting relatively higher returns increasing, particularly among European and US investors.

34%

34% 31%

2,000

30%

27% 24% 1,500

21% 21%

18%

17% 1,000

17%

26%

21% 16%

17% 17%

+1% 20%

13% 10%

10%

500

% of Overseas Activity

Source: JLL

30%

Japan: Investment Market Dynamics

Historical investment volume share by Sector 100%

Sector analysis

13%

11% 5%

•

By sector, office remained the largest investment category. Office investment volume in H1 2026 reached JPY 1,695.7 billion, accounting for 45% of total volume, with its share increasing from a low of 33% in full-year 2023. As office rents continue to rise notably, transactions in Tokyo (excluding 5-ku) are also increasing. For logistics facilities, acquisitions by J-REITs remain subdued, with the sector's share at 14%, continuing its decline since 2023. Hotels saw their investment share increase to 12%, as transactions expanded into regional markets.

Multifamily increased its investment share to 19%, driven by growing portfolio acquisitions by overseas investors.

80%

15% 9%

9% 14%

10% 2% 7%

13% 4% 5%

14% 5%

11% 25%

60%

17%

20%

12% 7%

16%

11% 11%

11% 18%

17%

12%

21%

16%

21%

9% 6%

6% 19%

10%

18%

19%

12% 13% 9%

20%

55%

53%

43%

40%

52%

43%

50%

52%

53% 40%

10%

16% 15%

13%

47% 32%

14%

24%

14%

65%

19%

12%

26%

8% 52%

19%

16%

17%

40% 60%

14%

12%

19% 31%

18%

12%

21%

19%

11%

13%

11%

33%

36%

46%

11%

43%

45%

Office

Retail

Logistics

Hotel

Multifamily

Other

Source: JLL

Japan: Investment Market Dynamics

Historical investment volume share by location 100%

Location analysis • •

•

By region, Tokyo CBD accounted for 43% in H1 2026, a slight increase from 42% in full-year 2025. Within Tokyo, large-scale office building transactions increased in areas outside CBD (5-ku), with Tokyo (excluding 5-ku) accounting for 23%, a significant increase from 14% in full-year 2025. Greater Osaka area’s share reached 15%, up from 13% in full-year 2025. A large-scale data center transaction exceeding JPY 150 billion was observed in Seika-cho, Kyoto Prefecture.

4% 3%

6% 2%

80%

14%

13%

14% 11%

2% 2% 11% 7% 18%

2% 3% 7% 8%

9% 8%

21%

5% 4% 11%

5% 4% 15%

4% 5% 10%

3% 4% 15%

13% 14%

20%

60% 16%

5% 3%

13%

17%

7% 4%

3% 3%

4% 3%

15%

14%

18%

16%

13%

20%

18%

16%

17%

18%

2% 3%

3% 5%

20%

13%

20%

16%

20%

43%

57%

43%

52% 42%

38%

46%

43%

39%

14%

46% 36%

34%

22%

13%

15% 8%

17%

14%

16%

42%

40% 28%

3% 5%

23%

13%

11% 18%

39% 29%

12%

4% 4%

17%

13% 57%

23%

25% 17%

40%

18%

13%

16% 17%

3% 4%

17%

19%

20%

3% 3%

43%

27%

Tokyo CBD (5-ku) Greater Osaka Other

Tokyo (Excluding 5-ku) Greater Nagoya

Greater Tokyo (Excluding Tokyo) Greater Fukuoka

Source: JLL Note: Tokyo CBC (5-kus) refers to Chiyoda-ku, Chuo-ku, Minato-ku, Shinjuku-ku and Shibuya-ku; Greater Tokyo refers to Tokyo, Chiba, Saitama and Kanagawa; Greater Nagoya refers to Aichi, Gifu and Mie; Greater Osaka refers to Osaka, Hyogo, Kyoto and Nara; Greater Fukuoka refers to Fukuoka, Saga, Nagasaki, Kumamoto, Oita, Miyazaki, Kagoshima and Okinawa. 8

Japan: Investment Market Dynamics

Cap Rates for Office and Logistics Facilities

Cap Rates

6.5% Forecast

•

Estimated cap rates for both office and logistics sectors had risen for two consecutive quarters in Q4 2025 and Q1 2026, but in Q2 2026, office cap rates remained flat while logistics cap rates continued to rise slightly. The divergence in cap rate trends between these two sectors is attributable to differences in expected rental growth rates. Although further interest rate increases are anticipated in the market, expected rental growth rates are increasing due to factors such as the growing adoption of CPI-linked rents, and cap rates for both sectors are expected to remain largely flat.

With cap rates remaining flat and supported by rental growth, estimated prices are likely to continue their upward trend. However, as rental growth rates differ by sector, area, and individual property, property selection is expected to become more critical for investors.

6.0% 5.5% 5.0%

4.5% 4.0% 3.5% 3.0% 2.5%

2.0%

Tokyo Grade A office

Greater Tokyo logistic facilities

Source: JLL Note: Tokyo Grade A office cap rate refers to the average NOI yield (assuming market rent) of Grade A offices in Tokyo CBD. Greater Tokyo logistics facility cap rate refers to the average NOI yield (assuming market rent) of large-scale leased logistics facilities in Greater Tokyo. 9

Research Japan Investment Market Dynamics H1 2026

Jones Lang LaSalle K.K. Tokyo Headquarters Kioi Tower, Tokyo Garden Terrace Kioicho 1-3 Kioi-cho Chiyoda-ku, Tokyo 102-0094 +81 3 4361 1800

Kansai Nippon Life Yodoyabashi Building 3-5-29 Kitahama Chuo-ku, Osaka 541-0041 +81 6 7662 8400

Fukuoka Fukuoka Daimyo Garden City 2-6-50 Daimyo, Chuo-ku, Fukuoka-shi Fukuoka 810-0041 +81 92 233 6801

Nagoya JP Tower Nagoya 1-1-1 Meieki, Nakamura-ku, Nagoya-shi Aichi 450-6321 +81 52 856 3357

For more information, please contact Manabu Taniguchi Senior Director Research Japan manabu.taniguchi@jll.com

Koji Naito Research Director Capital Markets Japan koji.naito@jll.com

Hiroshi Okubo Head of Research Research Japan hiroshi.okubo@jll.com

COPYRIGHT © JONES LANG LASALLE IP, INC. 2026 This report has been prepared solely for information purposes and does not necessarily purport to be a complete analysis of the topics discussed, which are inherently unpredictable. It has been based on sources we believe to be reliable, but we have not independently verified those sources and we do not guarantee that the information in the report is accurate or complete. Any views expressed in the report reflect our judgment at this date and are subject to change without notice. Statements that are forward-looking involve known and unknown risks and uncertainties that may cause future realities to be materially different from those implied by such forward-looking statements. Advice we give to clients in particular situations may differ from the views expressed in this report. No investment or other business decisions should be made based solely on the views expressed in this report.