MarketDynamics
Keytrends
1
GlobalInvestmentExpansion
Globalrealestateinvestmentvolumescontinueto expand,drivenbydeclininginterestratesand improvedlendingconditions.Investorappetite hasrecovered, withfundraisingincreasingforthe firsttimeinfouryears.Rentalgrowthhas accelerated, particularlyforhigh-gradeoffice properties,asleasingdemandrecovers andnew developmentdecreases. Officeinvestmentis recoveringglobally.
2
Japan'sInvestmentVolumeExceedsJPY6
Trillion,ReachingaRecordHigh
Large-scaleofficeandlogisticsfacilitydisposalsby corporationscontinuedin4Q2025,maintaining highinvestmentvolumes.Full-year2025 investmentvolumereachedarecordhighofJPY 6.218trillion.Tokyorankedsecondinglobalcity rankings.
3
MarketChangesDriveRealEstate Transactions
Supply-demandtightening,particularlyinthe officesector,andacceleratingrentalgrowthare encouraginginvestorinterest.Financial institutionscontinuetomaintainanaggressive lendingstance,supportingthebuoyancyofthe realestateinvestmentmarket.
4
Outlook
Asrealestateinvestmentexpandsglobally,the investmentappetiteforJapaneserealestatefrom bothdomesticandinternationalinvestors remainshigh.Portfoliorestructuringbyinvestors andcorporaterealestatedisposalsare progressing,increasinginvestmentopportunities forwell-locatedproperties.Therealestate investmentvolumein2026isexpected toexceed 2025levels,reachingthemid-JPY6trillionrange.
Globalinvestmentvolume
• Globalrealestateinvestment volume in2025 increased 19%year-on-year (y-o-y)toUSD842.6 billion.Investment volumesexpanded forthesecond consecutive year,driven bythedecline inglobal interestratesandimproved financing conditions.
• TransactionsintheAmericasincreased 20%y-o-y, primarilydriven bytheUnited States,whileEMEA (Europe, MiddleEastandAfrica)alsogrew20%and AsiaPacificincreased12%.
• Globaloffice investment hasbecome activeagaindue torecovering leasingdemand fromthereturn-toofficetrend andreduced newdevelopment. Investment volume in2025increased 31%y-o-y, with largetransactionsobserved inIndiaandHong Kong in4Q25,whileJapan, SouthKorea andSingapore saw increased investment byoverseasinvestorsinwelllocated, high-gradeofficeproperties.
Historicalglobalinvestmentvolume
Source:JLL
Globalcityrankingbyinvestment volume
Globalcityranking
• Inglobalcityrankings,Tokyo rankedsecond witha full-year2025investment volume ofUSD28.3billion, maintaining thesameposition as2024.Despitethe weakyen, Tokyo's investment volume reachedtoptierlevelsamong majorcities.
Source:JLL
HistoricalJapaninvestmentvolume
(1BillionJPY)
Japaninvestmentvolume
• Japan'srealestateinvestment volume forfull-year 2025increased 13%y-o-y toJPY6.218trillion.
• Japan'srealestateinvestment volume for4Q25 decreased 8%y-o-ytoJPY1.508trillion.Theprimary reasonforthequarterlydecline wasthe concentration oflargetransactionsin4Q24,which reached thesecond-highest levelonrecord.
• Nevertheless, 4Q25sawmajortransactions,including NissanMotor'sglobalheadquarters andalarge-scale logisticsfacilityinKoto ward, contributing tothe largestannualinvestment volumesincedata collection beganin2007.
Source:JLL
Inboundinvestments
• Investment byoverseasinvestors reached JPY2.144 trillionforfull-year2025,increasing 2.3timesfromthe previous year'sJPY940billion.
• Theshareofinbound investment indomestic real estateinvestment volume reached34%forfull-year 2025,matchingthehighestlevelsonrecord alongside 2007and2021.
• Fromthesecond halfof2025,globalinvestors have beenadvancing Japan-focused fundformations, indicating thatoverseas investorinterestinJapan continues tointensify.
Historicalinboundinvestmentvolume
Source:JLL
Japan:
Historicalinvestment volumesharebySector
Sectoranalysis
• Bysector, officespacecontinued toaccountforthe largestshareofinvestment. Full-year2025investment volume reachedJPY2.692trillion,representing 43% oftotalvolume, asignificantincreasefrom36%in full-year2024.Investor interesthasfurtherintensified amidnotableofficerentalgrowth incentralareas.
• Retailsawitsinvestment sharerisefrom7%inthe previous yearto11%,driven bymultipletransactions, including largecommercial facilitiesinGinzaand suburbanshopping centres.
• Forlogisticsfacilities,multiplelargetransactionswere observed, includingmajorfacilitiesinTokyo. However, investment sharedeclined forthesecond consecutive year,to16%,asJ-REIT acquisitionsof portfolios fromtheirsponsorsdecreased.
• Whileinvestment demand forhotelsremains robust, investment sharedecreased to10%duetothe limitedsupplyofproperties forsale.
• Theinvestment shareofmultifamilyproperties increased to16%,driven bygrowing portfolio acquisitionsof10-20properties bydomestic and overseasinvestors.
Source:JLL
Japan: Investment MarketDynamics
Historicalinvestment volumesharebylocation
Locationanalysis
• Byregion, Tokyo CBDaccounted for42%offull-year 2025investment, exceeding 40%forthefirsttime since2022.Transactionsinvolving largeoffice buildingsandmultifamilyportfolios contributed to thisincreasedshare.
• Meanwhile,theGreaterOsakaregion's share remained at13%,contracting from 22%infull-year 2024,primarilyduetofewerlargeproperty disposals compared totheprevious year.
Source:JLL
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.
CBD(5-ku)
(Excluding5-ku)
Tokyo(ExcludingTokyo)
CapRatesforOfficeandLogisticsFacilities
CapRates
• Since peaking in2009,capratesforbothofficeand logisticssectorshavebeen declining, butroseslightly in2025following increasesingovernment bond yields.
• According toOxfordEconomics, furtherinterestrate increasesareexpected, withcapraterisesanticipated forbothsectors.However, themagnitude ofincreases isexpected toremain limitedduetocontinued robust investment appetite fromdomestic andoverseas investors.
• Regarding pricing, theupwardtrend isexpected to continue asrentalgrowthoutpacesdownward pressurefromrisingcaprates.However, asrental growthratesvarybysector,areaandproperty, asset selection willbecome increasingly important for investors.
Source:JLL
TokyoGradeAoffice GreaterTokyologisticfacilities
JonesLangLaSalleK.K.
Tokyo Headquarters
KioiTower,
Tokyo Garden Terrace Kioicho
1-3Kioi-cho Chiyoda-ku, Tokyo 102-0094
+81343611800
Kansai
Nippon Life
Yodoyabashi Building
3-5-29KitahamaChuo-ku, Osaka541-0041
+81676628400
Fukuoka
FukuokaDaimyoGardenCity
2-6-50Daimyo, Chuo-ku,Fukuoka-shi
Fukuoka810-0041
+81922336801
Nagoya
JPTowerNagoya
1-1-1Meieki, Nakamura-ku,Nagoya-shi
Aichi450-6321
+81528563357
Formoreinformation,pleasecontact
HiroshiOkubo HeadofResearch Research
Japan
hiroshi.okubo@jll.com
ManabuTaniguchi
Senior Director Research
Japan
manabu.taniguchi@jll.com
KojiNaito ResearchDirector
CapitalMarkets
Japan
koji.naito@jll.com
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