Japan Investment MarketView Q2 2026

Investment volume rises 17% y-o-y;

expected NOI yields for offices and hotels set new record lows

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• Japan commercial real estate investment volume increased by 17% y-o-y to JPY 1,121.0 billion in Q2 2026, marking the first time that second quarter investment volume has exceeded JPY 1 trillion since 2008, shortly before the onset of the Global Financial Crisis (GFC). The largest transaction of the quarter was the sale of Sapporo Holdings’ real estate business, while the period also witnessed several acquisitions of JPY 10 billion or more by domestic investors in the office, hotel, and logistics sectors. Investment volume in the office and logistics sectors recorded double-digit percentage increases y-o-y, but volumes for the residential, retail, and hotel sectors declined y-o-y.

   

• Acquisition volume by J-REITs for the quarter (all transactions, including those below JPY 1 billion) totaled JPY 102.8 billion, down 78% from the previous quarter, when acquisitions through capital raises were active. Difficulties in growing their asset size through equity offerings prompted some J-REITs to focus on asset reshuffling. The period witnessed several residential acquisitions by J-REITs alongside disposals of land with leasehold interests.

• Expected NOI yields for prime assets in Tokyo fell by 5 bps q-o-q for both offices and hotels in Q2 2026, setting new record lows. Logistics facilities also saw expected yields decline by 1 bps q-o-q. Looking ahead to end-2027, the proportion of CBRE survey respondents expecting yields to rise expanded compared to the previous survey conducted in June 2025. With further interest rate increases anticipated, investors are expected to display even stronger demand for already scarce properties offering income upside potential.