Tokyo- world’s most traded real estate market
Tokyo overtook London as the world’s busiest real estate market in the first quarter of 2018, with mega-deals and an unusually positive economic outlook driving demand. Investment volumes in the Japanese capital more than doubled to US$9.1 billion in the three months to March, just beating New York and way ahead of third-placed London.
Global deal volumes rose 15 percent to US$165 billion, making the start of 2018 the biggest quarter for commercial real estate deals since 2007.Japanese real estate investment trusts (J-REIT) were also more active. Asia Pacific transactions rose 34 percent to US$40 billion.
Tokyo will see substantial office construction between now and 2020, which is expected to depress rental growth. But in the short term, rents are still rising (1.8 percent in the 12 months ending April) and Tokyo’s overall office vacancy rate is only 3 percent. Japan saw 1.8 percent GDP growth in 2017 and unemployment is down to a record 2.5 percent, which bodes well for future office demand.