• TRANSACTION VOLUME FALLS 26% Y-O-Y IN Q3 2020

Commercial real estate transaction volume fell by 26% y-o-y to JPY 599.0 billion in Q3 2020. Transactions by J-REITs fell 6 % y-o-y, while transactions by other domestic investors declined by 68%. In both cases, this represented the second consecutive quarter in which investment had fallen from the previous year. Meanwhile, the transactions by overseas investors marked an y-o-y growth for the fourth consecutive quarter. 

  • CBRE TANKAN (DI) WORSENS FOR OFFICE EXPECTED YIELD; ALL CATEGORIES IMPROVE FOR LOGISTICS

CBRE’s latest Tankan Survey conducted in September 2020 showed that the Diffusion Index (DI) for Tokyo Grade A office buildings improved from the previous quarter in three categories, including “transaction volume”, and worsened in the other three categories, including “expected yield”. Meanwhile, the DI for Greater Tokyo multi-tenant logistics facilities improved from the previous quarter in all seven categories. 

  • LOGISTICS AND RESIDENTIAL ACCOUNT FOR HALF OF TOTAL VOLUME

As a result of the pandemic, investment in the real estate market has been focused on assets such as logistics facilities and housing, on anticipation for stable cash flow. Total cumulative transaction volume for the first three quarters for the logistics and residential was JPY 1.2 trillion (up 95% q-o-q), the first time since the survey began in 2005 to exceed the JPY 1 trillion mark in the first three quarters of a year. Conversely, in the office market, more investors have become cautious on concerns that office demand may fall due to the wider introduction of remote working. For the whole year, transaction volume for offices and logistics facilities are likely to be at a similar level.