Investment MarketDynamics
Keytrends
GlobalInvestmentExpansion
Globalrealestateinvestmentvolumecontinuesto expand,supportedbyfavorablefinancing conditions.Investmentinofficebuildingsis growingworldwideduetorecovering leasing demandandreduced newdevelopmentactivity.
RisingRentsSupportingRealEstate Transactions
Tightsupply-demandbalance,particularlyfor officesector,andacceleratingrentgrowthare stimulatinginvestorappetite.Medium-tolongtermrentgrowthexpectationsareincreasingdue tofactorssuchasthegrowingadoptionofCPIlinkedrents,whichisexpected tooffsetthe negativeimpactofrisinginterestrate.
Japan'sInvestmentVolumeExceedsJPY2 Trillion,On
ParwithLastYear
InQ12026,investmentvolumeexceeded JPY2 trillion,matchingQ12025,whichrecorded the highestfirstquartervolumeinhistory.Thisquarter sawtransactionsofalarge-scaleofficebuilding andalarge-scalehotelinTokyoCBD.
Outlook
Bothdomesticandoverseas investorshavestrong investmentappetiteforJapaneserealestate. Constraintsonnewsupplyduetorising constructioncostsandlaborshortageswillfurther encourageinvestmentinexistingproperties.Real estateinvestmentvolumein2026isexpected to exceed 2025levels,reachingthemid-JPY6trillion range.
Historicalglobalinvestmentvolume
Globalinvestmentvolume
• Globalrealestateinvestment volume inQ12026 reached UD215.7billion,up18%y-o-y. Investment volume continues itsexpansionary trend, supported bysolidleasingdemand andfavorablefinancing conditions.
• TransactionsintheAmericasincreased 25%y-o-y, led bytheUS,whileAsiaPacificalsogrew31%.EMEA (Europe, MiddleEast,andAfrica),however, declined 2%.
• Investment inofficesectorcontinues toexpand globally,driven byexpanding leasingdemand accompanying thereturn-to-office trend and constraintsonnewsupply.
• TheimpactoftheMiddleEastsituationhasnot been seensofarbutmaymaterializegoing forward. Beyond therisksofinflationfromrisingenergy prices andeconomic slowdown, potential effects include constraints onnewsupplyduetomedium- tolongtermconstruction cost.
Source:JLL
Globalcityrankingbyinvestment volume
Globalcityranking
• IntheglobalcityrankingforQ12026,Tokyo ranked thirdwith$9.0billion.Whilethisrepresents adecline fromitssecond-place position inbothQ1andfullyear2025,Tokyo maintainsaleadofmore than40% over fourthplace, indicating thatTokyo's investment volume remainsatatoplevelamong majorcities.
• Singapore ranked firstledbymultiplelarge-scale officebuildingstransactions
Japaninvestmentvolume
• Japan'srealestateinvestment volume inQ12026 reached JPY2.075trillion,down 1%y-o-y. Thismarks onlythesecond timequarterlyinvestment volume hasexceeded JPY2trillion,following Q12025,which recorded thehighestfirstquartervolume inhistory.
• Strong appetite frominvestorsandcontinued provision ofinvestment opportunities aresustaining activemarketconditions. Thisquartersawseveral large-scaletransactions(exceeding JPY100billion), including theDentsuheadquartersbuildingandHyatt Regency Tokyo.
• Japan'srealestateinvestment markethasseen almostnoimpactfromtheMiddleEastsituationthus far.Lookingahead,whilethereareconcerns that prolonged conflictcould stagnatecorporate activity, risingenergy pricesandmaterialshortagescould potentially leadtofurtherconstraints onnewsupply.
Source:JLL
Inboundinvestments
• Investment byoverseasinvestors inQ12026totaled JPY671.9billion,remaining nearlyflatwitha1% increasey-o-y.
• Theshareofinbound investment inJapan's totalreal estateinvestment volume inQ12026was32%, continuing toabovethe30%markrecorded forfull^year2025.
• Investment appetite forJapanese realestateremains strong, particularlyamong globalinvestors, andflow ofinbound capitalislikelytocontinue atahighpace.
Historicalinboundinvestmentvolume
Sectoranalysis
• Bysector, officecontinued toaccount forthelargest shareofinvestment. Investment inofficeinQ12026 wasJPY989.1billion,representing 48%ofthetotal, continuing theincreaseinsharefromalowof33%in full-year2023.Asofficerentgrowth becomes more pronounced, investor interestisintensifying further, withJ-REITsalsoincreasing newacquisitions.
• Forlogisticsfacilities,acquisitionsbyJ-REITs remain sluggish,andtheinvestment sharecontinues to decline to12%.
• Forhotels,theinvestment shareincreased to15% duetotransactionsoflarge-scaleproperties andan increaseinthenumber ofdealsthemselves.
• Formultifamilyproperties, theinvestment share increased to19%,driven byfactorssuchasoverseas investoracquisitionsofco-living facilities.
Historicalinvestment volumesharebySector
Source:JLL
Historicalinvestment volumesharebylocation
Locationanalysis
• Byregion, Tokyo CBDaccounted for46%inQ12026, anincreasefrom42%infull-year2025.Inaddition to transactionsofalarge-scaleofficebuildinganda large-scalehotel, numberofmid-sizedofficebuilding transactionscontributed totheincreaseinshare.
• GreaterOsakaarea'ssharereached 16%,upfrom13% infull-year2025.Atransactionoflarge-scaleoffice buildingwasobserved inOsakaCBD.
Source:JLL
TokyoCBD(5-ku)
Tokyo(Excluding5-ku)
GreaterOsaka GreaterNagoya
GreaterTokyo(ExcludingTokyo)
GreaterFukuoka Other
Note:TokyoCBC(5-kus)referstoChiyoda-ku,Chuo-ku,Minato-ku,Shinjuku-kuandShibuya-ku;GreaterTokyoreferstoTokyo,Chiba,SaitamaandKanagawa;GreaterNagoyareferstoAichi, GifuandMie;GreaterOsakareferstoOsaka,Hyogo,KyotoandNara; GreaterFukuokareferstoFukuoka,Saga,Nagasaki,Kumamoto,Oita,Miyazaki,KagoshimaandOkinawa.
CapRatesforOfficeandLogisticsFacilities
CapRates
• Estimatedcapratesforbothofficeandlogistics sectors,whichhadbeenonadeclining trend since peakingin2009,roseslightlyinQ12026,following the trend attheend of2025.Theprimaryfactorwasrising government bond yields.
• According toOxfordEconomics, interestratesare expected tocontinue rising.However, expected rent growthratesareincreasing duetofactorssuchasthe growing adoption ofCPI-linkedrents,andcaprates forbothsectors areexpected toremain flat.
• Withcapratesremaining flatandsupported byrising rents,estimatedpricesareconsidered likelyto continue theirupwardtrend. However, asrent growth ratesdifferbysector, area,andindividualproperty, property selection isexpected tobecome more criticalforinvestors.
Source:JLL
TokyoGradeAoffice GreaterTokyologisticfacilities
JonesLangLaSalleK.K.
Tokyo Headquarters
KioiTower,
Tokyo Garden Terrace Kioicho
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Kansai
Nippon Life
Yodoyabashi Building
3-5-29KitahamaChuo-ku, Osaka541-0041
+81676628400
Formoreinformation,pleasecontact
ManabuTaniguchi
Senior Director Research
Japan
manabu.taniguchi@jll.com
KojiNaito Research
Director
CapitalMarkets
Japan
koji.naito@jll.com
Fukuoka
FukuokaDaimyoGardenCity
2-6-50Daimyo, Chuo-ku,Fukuoka-shi
Fukuoka810-0041
+81922336801
HiroshiOkubo HeadofResearch Research
Japan
hiroshi.okubo@jll.com
Nagoya
JPTowerNagoya
1-1-1Meieki, Nakamura-ku,Nagoya-shi
Aichi450-6321
+81528563357
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