This week the Financial Times, CNBC and CLSA analyst Nicholas Smith had a lot to say about Japanese real estate and the economy in general.
Key Takeaways:
Leo Lewis of the Financial Times writes “Overseas real estate buyers identify Japan as an opportunity” on October 2nd.
Lee Ying Shan of CNBC writes “Japan’s property sector sees ‘golden period’ as foreign investments surge 45%”On October 3rd.
Nicholas Smith of CLSA on Bloomberg predicted Japan’s Yield Curve Control Likely Gone By April on October 5th.
On October 2nd, Leo Lewis of the Financial Times penned a lengthy article stating Japan has seen a remarkable shift in its real estate landscape in 2023, as it transforms from a tourist destination into a hotbed for property investment.
Driven by factors like a weak yen and low borrowing costs, individuals from Singapore, Hong Kong, and mainland China have been actively buying real estate in Japanese cities, such as Tokyo for upscale apartments, Osaka for its future casino, Karuizawa for mountain retreats, Kyoto for renovated wooden mansions, and Niseko for prestigious ski lodges.
Real estate brokers have reported a surge in inquiries from foreign buyers, with institutional investors, sovereign wealth funds, private equity firms, and corporations also pouring billions into the market.
These investors are attracted to Japan's political stability, a stable financing environment, and signs of growth.
Institutional investment in Japanese real estate has grown substantially, with international investment reaching ¥513 billion in the first half of 2023, up from ¥362.1 billion in the same period the previous year.
Tokyo has become one of the world's most investable cities, attracting significant funds. Singaporeans have emerged as active cross-border investors due to the yen's depreciation.
Investment tactics have shifted toward growth sectors like logistics, hotels, inns, and restaurants, all of which were affected by the COVID-19 pandemic but are now rebounding with international tourism.
The Japanese market's liquidity has created opportunities for large-scale deals, such as the potential sale of Singaporean sovereign wealth fund GIC's Shiodome City Center skyscraper in Tokyo.
On October 3rd, CNBC published an article stating foreign investments in Japan's real estate sector have surged due to a weak Japanese yen and the country's central bank's ultra-loose monetary policy.
According to Henry Chin, CBRE's Head of Asia-Pacific Research, this is a golden period for Japanese real estate, driven by transparent and strong fundamentals in the retail and multifamily sectors.
Japan's favorable lending terms, including a 70% loan-to-value ratio and low borrowing costs, have also boosted demand.
On October 5th, CLSA Japan Strategist Nicholas Smith shared insights on the potential intervention by the Bank of Japan in currency markets, Japanese government bonds, and his perspective on the banking sector during his appearance on Bloomberg Television.
Courtesy of Bloomberg.
