The results of CBRE’s latest Tokyo office survey conducted for April 2015 have revealed that the average expected yields in key locations in the city have declined across all sectors. They were lowest in the office sector, hitting a record low since the survey began in 2003 of 3.85 per cent.
Expected yields for Tokyo’s central five wards dropped to 5.3 per cent. Other sectors also showed declines of between 10-15 bps. Expected yields remain on a downward trend, and offices in Nagoya dropped by 15 bps and were flat in Osaka. The decrease in yields has also been felt in regional cities; declines of a minimum of 10 bps have been noted in Sendai, Sapporo and Hiroshima.
The total value of real estate investment transactions, worth at least JPY 1 billion, increased by 8.6 per cent in the first quarter of this year. Investments by J-REITs added up to JPY 500 billion, making up 45 per cent of the total and marking a 33 per cent year-on-year increase. These figures indicate that J-REITs are still very interested in adding their acquisitions.
The total value of transactions by foreign investors doubled year-on-year to JPY 182 billion, an increase of 16 per cent overall. The size of the purchases were smaller than those made by Japanese investors, but the rate of increase outpaced local buyers for the fourth consecutive quarter.
