Japan Real Estate Report 2015
BMI View: The Japanese commercial real estate market has seen an increase in international investors'interest and solid demand for property space in all three sub-sectors. Although the focus remains on Tokyo,partly due to the approaching 2020 Olympic Games, investors are increasingly looking further afield, withsignificant developments in the two other cities we monitor Yokohama and Osaka. This demand is expectedto translate into stable rental yields, with marginally rising rates in all three cities during 2015 and 2016 inthe commercial real estate market.
Japan is on a trajectory for a slow recovery as its economy crawls out of a recession, reflected in 0.0%growth during 2014. However, the country's economy continues to struggle and we expect growth to beslow over the next few years, despite the government's stimulus plans. While the weakened yen and relaxedvisa regulations have increased international investment and tourism levels, the increased sales tax from2014 and the loss of competitiveness of key Japanese industries continue to weigh on the economy. For2015, we forecast a minimal real GDP growth uptick of 1.2%, followed by a lower 0.7% through to 2019.
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