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1、REPORTMarketOutlookIntelligent Investment2023JAPANREAL ESTATECBRE RESEARCHASIA PACIFIC2CBRE RESEARCH 2022 CBRE,INC.Intelligent InvestmentAsia Pacific Real Estate Market Outlook 2023|JapanContentsEconomyThe moderate recovery of the Japanese economy is expected to continue in 2023,driven by consumer s
2、pending and corporate capital investment.However,with the output gap still negative,the Bank of Japan(BoJ)has made it clear that it will retain its loose monetary policy for the time being.If the economic recovery were to lead to a rise in corporate earnings as well as real wages,thereby maintaining
3、 moderate inflation,the likelihood of a shift to a tighter monetary policy would increase.However,the consensus is that such a move,were it to eventuate,would not occur until H2 2023 at the earliest.OfficeWhile relocations to higher grade office buildings were on the rise in 2022,downsizings and con
4、solidations were still widely observed,leading to a general upward trend in vacancy rates.As an increasing number of companies favor the implementation of hybrid working schemes,tenants are likely to become more selective than before with respect to office specifications.With increases in supply for
5、ecast for most cities,market rents are likely to continue to fall.RetailThe Ginza highstreet market will continue to be driven primarily by demand from luxury goods brands in 2023.While high street rents appear to have bottomed and maintaining the low levels,they should begin to rise once again in Q
6、4 2022 and continue to slowly increase thereafter.LogisticsUnprecedented volumes of new supply is expected across Japan in 2023,due to the greater focus placed on logistics properties by developers.As a result,vacancy rates are expected to rise in all four metropolitan areas,despite continued robust
7、 tenant demand for logistics space.InvestmentCommercial real estate transaction volume in Japan for 2022 is expected to be slightly lower than the previous years level.Nevertheless,expected yields have continued to decline,indicating that investor appetite remains stable.Some investors have become m
8、ore selective amid overseas interest rate hikes and concerns over a possible recession in US and Europe.However,the BoJ appears unlikely to tighten its monetary policy in the short term,and appetite for Japan real estate looks set to remain robust in 2023.0102030405Economy01The moderate recovery of
9、the Japanese economy is expected to continue in 2023,driven by consumer spending and corporate capital investment.However,with the output gap still negative,the BoJ has made it clear that it will retain its loose monetary policy for the time being.If the economic recovery were to lead to a rise in c
10、orporate earnings as well as real wages,thereby maintaining moderate inflation,the likelihood of a shift to a tighter monetary policy would increase.However,the consensus is that such a move,were it to eventuate,would not occur until H2 2023 at the earliest.4CBRE RESEARCH 2022 CBRE,INC.Intelligent I
11、nvestmentAsia Pacific Real Estate Market Outlook 2023|JapanSource:Japanese Cabinet Office,CBRE,November 2022.Figure 1:Real GDP q-o-q growth and major contributing itemsAfter shrinking by 4.3%in 2020,the Japanese economy has generally maintained positive growthever since,albeit with the occasional sh
12、ort-term regression(Figure 1).The lifting of all measures tocontain the spread of COVID-19 at the end of March 2022 led to a rise in private consumption andcorporate capex in Q2 2022.Although the most recent quarter(Q3 2022)showed a 0.8%q-o-qdecline in real GDP on an annualized basis,this was largel
13、y due to a temporary increase inimported services.With individual spending and capital investment both continuing their positivegrowth,GDP is expected to expand in Q4 2022.Compared to the most recent peak of JPY 557 trillion(annualized)recorded in Q3 2019,just beforethe latest consumption tax rate h
14、ike,GDP continues to be below pre-pandemic levels,registeringJPY 546 trillion in Q3 2022.While Japan never instituted any strict lockdowns,numerous state ofemergency declarations and the other restrictive measures continued through until March 2022,delaying the reopening of the economy in comparison
15、 to other nations.The lifting of borderrestrictions in Japan also took much longer than it did in other countries.The removal of daily caps on visitor numbers and the lifting of the embargo on individual tourismon October 11th have fueled expectations for the recovery of inbound tourist demand.Witho
16、ut thefull-scale return of tourism from mainland China,however,which accounted for almost 40%ofindividual tourist consumption prior to the pandemic,neither visitor numbers nor inbound touristspending is likely to reach pre-pandemic levels.In contrast,domestic consumers possess amplespending power as
17、 a result of increased savings during the pandemic,suggesting that individualspending should continue to drive the economic recovery.The rise in the cost of everyday items,however,is likely to slow the pace of the rebound.In terms of corporate capital investment,pent-updemand caused by under-investm
18、ent during the pandemic should begin to manifest itself in actualspending figures in the coming quarters.Japanese economy to continue its slow recoveryFigure 2:Annual real GDPSource:Cabinet Office,CBRE forecast,November 2022.01 Economy-0.6%1.3%-1.8%4.9%-1.8%4.5%-0.8%-5-4-3-2-10123456Q1 2021Q2 2021Q3
19、 2021Q4 2021Q1 2022Q2 2022Q3 2022Private consumptionCorporate CapexExportImportGDP(Q-o-q,annualized,)5005550560-5-4-3-2-10123Avg.202120222023Absolute amount(RHS)%change y-o-y%JPY trnForecast5CBRE RESEARCH 2022 CBRE,INC.Intelligent InvestmentAsia Pacific Real Estate Market O
20、utlook 2023|JapanSource:Datastream,CBRE,November 2022.Figure 3:Inflation ratesWhile the core consumer price index(excluding fresh foodstuffs)recorded a 3.6%y-o-y increase inOctober 2022,the largest such rise in approx.40 years,it remains well below the 7.1%(Nov)in theU.S.(as of Nov)and the 11.1%in t
21、he UK.(as of Oct).As large portion of the inflation in Japan isattributable to rising energy and food costs,the situation is quite different from the U.S.,where thecause of the inflation is seen to be mainly driven by surge in demand.Indeed,the fact that there isa wide gap between rises in producer
22、price and consumer price is indicative of the difficultiescompanies are having in passing on their cost increases to final product prices.In light of such economic situation,the BoJ is committed to maintaining its loose monetary policy.With Japans output gap still negative,the BoJ has indicated that
23、 this is no time for monetarytightening,opting to keep its long-term interest rates within the-0.25%to 0.25%bracket.The BoJs commitment to its easy monetary policy stands in stark contrast to the monetarytightening being implemented by the central banks of most other major nations in order to keepin
24、flation under control.Should the Japanese economy continue to recover to the extent that realwages begin to rise as well as corporate profits,then a virtuous cycle could be created that pushesoverall prices gently upwards.The BoJs current stance is that it would look to normalize themonetary policy
25、should this scenario occur.With US and Europe increasingly likely to enter arecession,however,most observers believe that H2 2023 is the earliest that any such change inpolicy in Japan would be possible.Easy monetary policy set to continueFigure 4:10-year Japan government bond yieldSource:Datastream
26、,CBRE,November 2022.01 Economy-3%0%3%6%9%12%2017.012017.042017.072017.102018.012018.042018.072018.102019.012019.042019.072019.102020.012020.042020.072020.102021.012021.042021.072021.102022.012022.042022.072022.10Domestic producer price indexConsumer price index(excl.fresh food)-0.050.000.050.100.150
27、.200.252021.012021.022021.032021.042021.052021.062021.072021.082021.092021.102021.112021.122022.012022.022022.032022.042022.052022.062022.072022.082022.092022.10%6CBRE RESEARCH 2022 CBRE,INC.Intelligent InvestmentAsia Pacific Real Estate Market Outlook 2023|JapanSource:CBRE,November 2022.Figure 5:Re
28、al GDP growth,U.S.&EuropeEmerging geopolitical risks,increasing energy costs and other costs of living,together with thehiking of interest rates in order to suppress inflation,have led CBRE to project a moderate globaleconomic recession centered upon Europe and North America in 2023.In both the U.S.
29、and Europe,however,the extent of this recession should be limited.The reasons for anticipating the recessionto be short-lived are as follows:Despite the recent rises in cost of living and interest rates,individual consumption andcorporate capital expenditure remain consistently robust.Although some
30、major IT firms have implemented layoffs,globally there remain more jobsthan the number of job seekers.This suggests that large waves of forced redundancies areunlikely to spread to other industries,meaning that individual spending in the West isunlikely to slump significantly.With corporate appetite
31、 for IT investment remaining strong,the digital economy isforecasted to continue to grow.Corporations also remain keen to invest in the fields of lifescience and biotechnology.Rising interest rates are expected to keep the U.S.s 2023 GDP unchanged from its current levels.Provided the economy does no
32、t worsen to the extent seen during the global economic crisis,theunemployment rate is unlikely to rise too significantly above its current level of 3.7%and should notreach anything like the 6%levels seen in previous recessions.As they are more prone to the effectsof rising energy costs,however,Europ
33、ean economies are likely to worsen more significantly.AsiaPacific should remain in relatively more robust economic health due to the fact that inflation in theregion has been kept in check and governmental policies are expected to be implemented in orderto avoid recession.Global economy projected to
34、 experience moderate recessionFigure 6:Real GDP growth,APACSource:CBRE,November 2022.01 Economy-2%0%2%4%6%8%10%2021Q32021Q42022Q12022Q22022Q32022Q42023Q12023Q22023Q32023Q42024Q12024Q22024Q32024Q4U.S.EurozoneU.K.0%1%2%3%4%5%6%7%2021Q32021Q42022Q12022Q22022Q32022Q42023Q12023Q22023Q32023Q42024Q12024Q22
35、024Q32024Q4JapanSouth KoreaAustraliaChinaForecastForecastOffice02While relocations to higher grade office buildings were on the rise in 2022,downsizings and consolidations were widely observed,leading to a general upward trend in vacancy rates.As an increasing number of companies favor the implement
36、ation of hybrid working schemes,tenants are likely to become more selective than before with respect to office specifications.With increases in supply forecast for most cities,rents are likely to continue to fall.8CBRE RESEARCH 2022 CBRE,INC.Intelligent InvestmentAsia Pacific Real Estate Market Outl
37、ook 2023|JapanRobust demand for competitive buildingsIncreased tenant activity has been observed since the start of 2022,with more companiesrelocating to buildings of higher grades,to superior locations,or to larger premises.Theimplementation of hybrid working combining office and remote work has fr
38、equently acted as acatalyst for office relocations,with the volume of newly leased floor area returning to pre-pandemiclevels(Figure 1).Demand for Grade A offices and others with competitive advantages has remained robust.TheGrade A vacancy rate fell by 0.5 points to 2.0%in Q1 2022,representing the
39、first q-o-q declinesince Q2 2020.While new supply pushed the vacancy rate back up to 3.8%in Q3 2022,it hasremained consistently below the vacancy rates for other grades since Q4 2020.Office downsizingsand consolidations have also been widely observed,however,with large vacancies arising in lesscompe
40、titive buildings.The All-Grade vacancy rate has been increasing since Q2 2020,reaching4.9%in Q3 2022,up 1.3 points from a year ago.With much new supply slated for 2023,rents are being lowered,particularly at larger buildingspreparing to face new competition.By Q3 2022,All-Grade rents had fallen by a
41、 total of 8.6%fromtheir peak in Q1 2020.With Grade A buildings having recorded a decline of 10.9%over the sameperiod,the largest fall of any grade,some properties in this category are offering good value formoney.One of the reasons that the Grade A vacancy rate has been kept relatively in check is t
42、hatrents have been more aggressively lowered than in other grades,expanding the range ofcompanies that can afford leases.Tokyo*Estimated total take-up is indexed to the average of each period from 2015 to 2019 as 100.Aggregation target is rental office buildings with a total floor area of 500 tsubo
43、or moreSource:CBRE,Q3 2022.0204060801001202019Q42020Q12020Q22020Q32020Q42021Q12021Q22021Q32021Q42022Q12022Q22022Q3Figure 1:Estimated total take-up in Tokyo 23 wards(Indexed)02 Office9CBRE RESEARCH 2022 CBRE,INC.Intelligent InvestmentAsia Pacific Real Estate Market Outlook 2023|JapanOffice tenants be
44、coming more selectiveTenants are becoming more selective with respect to office specifications,with demand on the risefor higher-grade buildings in superior locations asking rents that provide good value for money.This is a result of factors including more available options due to increasing vacancy
45、,and risingcost consciousness driven by higher material costs.With the surge in implementation of remoteworking practices triggered by the COVID-19 pandemic,furthermore,many companies haverecalibrated their office needs in terms of both space and functionality.These office reforms havemeant that man
46、y companies are now demanding more from their offices than they used to duringthe days of complete office attendance.Issues prioritized when relocating to new premises tend todiffer significantly between companies which have already introduced hybrid working schemes andthose which have not,with the
47、former recording higher responses for all items(Figure 2),underscoring their desire for higher quality premises.Tokyo(cont.)Source:CBRE,March 2022,”2022 Japan Office Occupier Survey”1st2nd4th3rd5th6th8th7th9th10th11th1st2nd3rd5th4th6th7th12th10th10th12th20%30%40%50%60%70%80%90%Transportconvenience(c
48、ommuting)Cost(includingrent,utilities,admin,etc)Transportconvenience(salesactivities)Location(reputation,industrialdensity)Comfort(air conditioning,lighting,etc)SecurityEarthquake-proofingBusinesscontinuityplanning(BCP)Buildingmanagementsystems(cleaning,etc)BuildinggradeRecruitmentadvantagesTotalHyb
49、rid work companiesFull attendance companies(n=221)Figure 2:Prioritized criteria for new office building selection (differences between hybrid work and full attendance companies)02 Office10CBRE RESEARCH 2022 CBRE,INC.Intelligent InvestmentAsia Pacific Real Estate Market Outlook 2023|JapanSource:Event
50、s and Planning Unit,Nikkei Inc.Investigation:Nikkei Research Inc.Cooperation for investigation:CBRE”Survey on office usage”,August 202269.7%8.7%21.6%0%20%40%60%80%100%ContinueNot continuedUnder considerationFigure 3:Of the companies implementing remote work,plans to continue remote work in the futur
51、eLimited impact on office demand from remote workingWhile office-based work is still regarded as the norm in Japan,a large number of companiescontinue to operate hybrid working schemes.According to the results of a recent CBRE occupiersurvey of companies in the Greater Tokyo,some 70%answered that th
52、ey planned to continueusing remote working practices(Figure 3).However,the median office attendance rate for thosecompanies who indicated they planned to offer remote working as an option was 70%,with a similarfigure estimated for two to three years into the future(Figure 4).This suggests that any d
53、ecline inoffice demand as a result of permeation of remote working is likely to be limited in scale,and thatbuildings offering superior lease terms are likely to continue to attract tenants.Tokyo(cont.)Figure 4:Office attendance rates current(Jul-Aug 2022)and future(2-3 years later)Source:Events and
54、 Planning Unit,Nikkei Inc.Investigation:Nikkei Research Inc.Cooperation for investigation:CBRE”Survey on office usage”,August 202202 Office0%2%4%6%8%10%12%14%16%18%20%0%10%20%30%40%50%60%70%80%90%100%Current(Jul-Aug 2022)Future(2-3 years later)Current(Jul-Aug 2022)Future(2-3 years later)Median70%70%
55、(n=132)(Response rate)(Office attendance rates)11CBRE RESEARCH 2022 CBRE,INC.Intelligent InvestmentAsia Pacific Real Estate Market Outlook 2023|JapanOffice requirements continue to become more diverse and sophisticatedCorporate interest in sustainability has risen in recent years.Among the related i
56、ssues,mostcompanies place the highest priority on worker health and well-being(Figure 5).This suggests thatmore firms are likely to look to create workplace environments that promote staff well-being inorder to improve productivity,as well as to attract and retain talents.Tenants office requirements
57、are therefore likely to become more diversified and sophisticated than ever before.At the same time,the Japanese economy is projected to continue to recover,albeit at a moderatepace.As such,relocations to higher grade buildings and expansions should continue to increase.Itis likely,however,that any
58、rebound in demand for office space driven by an economic recovery willbe less dramatic than it would have been prior to the pandemic,as a result of office expansionneeds being somewhat suppressed by the proliferation of hybrid working styles.Under hybridworking schemes,a certain level of staff incre
59、ases can be handled by adjusting office attendancerates,without the need to expand actual office floor space.Indeed,an increasing number ofcompanies are now factoring in hybrid work to keep their required office floor space below what itwould have been prior to the pandemic.Tokyo(cont.)Source:Events
60、 and Planning Unit,Nikkei Inc.Investigation:Nikkei Research Inc.Cooperation for investigation:CBRE”Survey on office usage”,August 2022Figure 5:Sustainability priorities for business activities(up to three responses allowed)02 Office52.0%39.3%38.9%30.2%29.0%15.9%4.0%0%10%20%30%40%50%60%Improving empl
61、oyee health and well-beingReducing greenhouse gas emissionsTargets around energy emissionsWe do not have any sustainability prioritiesImproving social mobility,social justice,equality and/or diversityReduction in air,water,or land pollutionIncreasing use of local suppliers12CBRE RESEARCH 2022 CBRE,I
62、NC.Intelligent InvestmentAsia Pacific Real Estate Market Outlook 2023|JapanSignificant Grade A supply to stimulate office relocation demandCBRE expects the Grade A vacancy rate to peak in 2023,when abundant supply is planned,beforefalling thereafter.New supply in 2023 across all grades is projected
63、to reach 240,000 tsubo,30%above the annual average over the past few years.Some 190,000 tsubo,or 80%of this amount,isGrade A floor space,approximately double the grades annual average supply.Pre-leasing progressfor these Grade A buildings remains slow,with many of them likely to come on stream less
64、thanfully occupied.With a certain number of secondary vacancies also projected to appear in existingGrade A buildings,CBRE forecasts the Grade A vacancy rate to reach 5.2%by Q4 2023,an increaseof 1.4 points from Q3 2022.However,as Grade A buildings will still provide companies with the most appropri
65、ate solutions forcompanies to meet their ever diversifying and increasingly sophisticated needs,vacancies shouldbe steadily filled.New office buildings planned for development are increasingly likely to feature awide range of amenities such as retail outlets,hotels,medical clinics,or schools,and are
66、 more likelyto have wellness or environmental certification,high-level Business Continuity Processing(BCP)functionality,and renewable energy capabilities.As a result,while the Grade A vacancy rate mayexperience a slight surge in 2025 on the back of more supply-demand factors,it should generallydecli
67、ne gradually from its peak in 2023.CBRE projects the Grade A vacancy rate for Q4 2025 to beat 4.5%,only 0.7 points above the current Q3 2022 level,and the lowest of all three grades.Tokyo(cont.)Source:CBRE,Q3 2022.Figure 6:Tokyo new supply and vacancy rate02 Office3.6%4.5%6.1%6.9%5.3%6.4%5.1%6.1%0%2
68、%4%6%8%10%12%050,000100,000150,000200,000250,000300,0002008200920000022202320242025Grade A New SupplyOther New SupplyGrade A Vacancy Rate(RHS)Grade A-minus Vacancy Rate(RHS)Grade B Vacancy Rate(RHS)All-grade Vacancy Rate(RHS)tsuboForecast13CBRE RESEARCH 20
69、22 CBRE,INC.Intelligent InvestmentAsia Pacific Real Estate Market Outlook 2023|JapanRentscontinueto drop slightlyacross allgradesThe vacancy rates for other grades of office are projected to continue rising through until 2025.Grade A-minus offices are likely to bear the brunt of the effect of new Gr
70、ade A supply,withsignificant vacancies set to appear in buildings without major competitive advantages.CBREprojects the Grade A-minus vacancy rate for Q4 2025 to rise by 1.1 points from its current level to6.9%,the highest level among all three grades.Despite the fact that Grade B buildings areacces
71、sible to companies of all sizes from a wide range of industries,vacancies are expected toincrease in less competitive properties as a result of consolidations or relocations to newlycompleted premises.The Q4 2025 Grade B vacancy rate is projected to reach 6.4%,up 1.5 pointsfrom its current level,whi
72、ch is the largest increase among all grades(Figure 6).Rents should continue to decline across all grades,but larger drops are likely to be seen in lowergrades.Estimated achievable rents for Grade A buildings in Q4 2025 are JPY 31,150 per tsubo,a10.4%decline from the level as of Q3 2022.Rents are exp
73、ected to be further lowered for lesscompetitive Grade A-minus buildings,with an 11.0%decline from current levels to JPY 21,350 pertsubo predicted.As Grade B buildings are anticipated to see the most significant rise in vacancyrate between now and 2025,rents are expected to fall to JPY 19,050 per tsu
74、bo across the sameperiod,a decline of 12.0%from current levels and a slightly sharper downturn than those seen inother grades(Figure 7).Tokyo(cont.)Source:CBRE,Q3 2022.Figure 7:Tokyo assumed achievable rents02 Office34,450 31,150 23,800 21,350 21,550 19,050 21,460 19,260 15,00020,00025,00030,00035,0
75、0040,00045,00050,0002008200920000022202320242025Grade AGrade A-minusGrade BAll GradeJPY/tsuboForecast14CBRE RESEARCH 2022 CBRE,INC.Intelligent InvestmentAsia Pacific Real Estate Market Outlook 2023|Japan4.6%10.4%3.8%5.3%4.0%6.4%0%3%6%9%12%15%010,00020,0003
76、0,00040,00050,00060,00070,00080,00090,000100,0002008200920000022202320242025Grade A New SupplyOther New SupplyGrade A Vacancy Rate(RHS)Grade B Vacancy Rate(RHS)All Grade Vacancy Rate(RHS)tsuboAbundant supply in 2024 to push Grade A vacancy rate above 10%Al
77、l-grade new supply for 2022 was 52,000 tsubo(including 38,000 tsubo of Grade A space),andwas double the past yearly average.With net absorption falling once more,as was the case in 2021,almost all new buildings commenced operation at less than full occupancy.The Grade A vacancyrate registered a y-o-
78、y increase of 2.8 points to reach 4.7%in Q3 2022.As in 2021,most vacanciesfilled in 2022 comprised smaller units.Medium-sized buildings offering good value for their locationor grade were the most popular,with vacancies filled by upgrading or expansionary relocations.Since the beginning of 2022,corp
79、orate interest in improving office environments has been on therise,with demand increasing for higher grade buildings in superior locations.Currently,landlordsare lowering rents for properties with vacancies,particularly Grade A buildings and others in higherprice brackets,which should lead to great
80、er tenant interest in Grade A properties.With no newGrade A supply slated for 2023,the Grade A vacancy rate is projected to drop to 3.6%by Q4 2023.In 2024,a record 93,000 tsubo of new supply is due to come on stream,80,000 tsubo of which isGrade A office space,equivalent to over 20%of the existing G
81、rade A stock of 360,000 tsubo.Withmany of them expected to commence operation with vacancies,CBRE projects the Q4 2024 GradeA vacancy rate to reach 10.2%.In light of the 27,000 tsubo of new supply currently anticipated in2025,the vacancy rate should reach 10.4%by the end of that year,which would mar
82、k a 5.7-pointincrease from the current level.The Grade B vacancy rate fell by 0.4 points q-o-q to 3.2%in Q3 2022,representing the first q-o-qdecline in two and a half years.New Grade B supply between now and 2025 is slated to consist of amere 18,000 tsubo,just a fraction of the 1,000,000 tsubo of ex
83、isting stock.While some vacanciesare anticipated to arise as a result of completion of new Grade A premises,vacancies should besteadily filled in the coming years,especially in competitive buildings.The Q4 2025 Grade Bvacancy rate is projected to rise by 2.1 points from the Q3 2022 figure to reach 5
84、.3%,a considerablysmaller increase than that forecast for Grade A(Figure 8).OsakaSource:CBRE,Q3 2022.Figure 8:Osaka new supply and vacancy rate02 OfficeForecast15CBRE RESEARCH 2022 CBRE,INC.Intelligent InvestmentAsia Pacific Real Estate Market Outlook 2023|JapanGrade B rents expected to fall more si
85、gnificantlyThe loosening of the supply-demand balance should ensure rents continue to fall.Compared totheir most recent peaks,Grade A rents for Q3 2022 are down by 7.7%from Q1 2020,while Grade Brents have slipped by 4.2%from Q3 2020.With Grade A rents having dropped more significantly,the gap betwee
86、n the two grades has narrowed.As such,Grade B rents are likely to begin to fallsomewhat more steeply in the coming years.CBRE expects achievable rents to slip to JPY 22,250per tsubo for Grade A and JPY 13,150 for Grade B by Q4 2025,down from their Q3 2022 level by9.0%and 11.1%,respectively(Figure 9)
87、.Osaka(cont.)Source:CBRE,Q3 2022.24,300 22,250 14,750 13,150 14,170 12,910 9,00011,00013,00015,00017,00019,00021,00023,00025,00027,00029,0002008200920000022202320242025Grade AGrade BAll GradeJPY/tsuboFigure 9:Osaka assumed achievable rents02 OfficeForecast
88、16CBRE RESEARCH 2022 CBRE,INC.Intelligent InvestmentAsia Pacific Real Estate Market Outlook 2023|JapanMore take-up of larger spaces seen in H2 2022Manufacturers and other tenants remained cost-conscious in 2022,with most tenant activityobserved in mid-sized buildings offering relatively cheap rents
89、for their grade or location.Vacancies were filled in such buildings by companies looking to upgrade or expand,or those whosecurrent premises were being redeveloped.The Grade B vacancy rate fell by 0.5 points q-o-q to4.6%in Q2 2022,its first q-o-q decline since Q1 2020.Several companies also sought t
90、o downsizetheir premises during 2022,with the supply-demand balance across the market as a wholecontinuing to loosen.The All-Grade vacancy rate logged a y-o-y increase of 2.0 points to reach5.8%in Q3 2022.With approximately 20,000 tsubo of new supply projected for 2023,30%abovethe annual average for
91、 the past few years,the vacancy rate is likely to continue to climb.Rents are being lowered in many of the more expensive buildings,particularly those in the Grade Acategory,gradually leading to more interest for large Grade A vacancies which had previouslyattracted little attention.Grade A vacancie
92、s are likely to continue to be filled by relocation aimed atconsolidations or upgrades.With no new supply due to come on stream until after H1 2023,theGrade A vacancy rate is projected to slide by 1.1 points from Q3 2022s level to 7.4%by Q2 2023.One new building is slated for completion in Q3 2023,h
93、owever,and another in Q1 2024,which willprovide a total of 18,000 tsubo of new supply.As these buildings are anticipated to commenceoperation at less than full occupancy,CBRE projects the Grade A vacancy rate to rise once again,reaching 8.5%by Q4 2024.NagoyaSource:CBRE,Q3 2022.Figure 10:Nagoya new s
94、upply and vacancy rate02 Office8.2%6.5%4.9%5.7%5.7%5.7%0%3%6%9%12%15%05,00010,00015,00020,00025,00030,00035,00040,00045,00050,0002008200920000022202320242025Grade A New SupplyOther New SupplyGrade A Vacancy Rate(RHS)Grade B Vacancy Rate(RHS)All Grade Vacan
95、cy Rate(RHS)tsuboForecast17CBRE RESEARCH 2022 CBRE,INC.Intelligent InvestmentAsia Pacific Real Estate Market Outlook 2023|JapanLoose supply-demand balance should cause rents to continue to fall,particularly in high-end buildingsSome 14,000 tsubo of new Grade B supply is slated for the period between
96、 2023 and 2025,suggesting that vacancies are likely to appear in less competitive buildings.However,demand iscurrently stable for Grade B offices,and should remain so for the foreseeable future.For thisreason,CBRE forecasts the Grade B vacancy rate to reach 6.6%by Q4 2024,well below the GradeA rate.
97、With no new supply planned for H2 2025,vacancy rates should decline across all grades thereafter.CBRE projects the Grade A vacancy rate as of Q4 2025 to be at 6.5%,2.0 points lower than thecurrent level,and the Grade B vacancy rate to be 5.7%,0.6 points higher than the current level(Figure 10).The l
98、oosening of the supply-demand balance should lead to downward rent adjustments,particularly in high-end buildings.By Q4 2025,Grade A achievable rents are projected to havefallen by 11.4%from their Q3 2022 levels to JPY 23,750 per tsubo.Grade B rents are expected toslip by a relatively smaller magnit
99、ude than Grade A,as many Grade B buildings are still seen asproviding good value for money.CBRE projects Grade B rents to fall by 3.8%to JPY 13,750 pertsubo over the same period(Figure 11).Nagoya(cont.)Source:CBRE,Q3 2022.Figure 11:Nagoya assumed achievable rents02 Office26,500 23,750 14,250 13,750
100、13,720 13,220 10,00012,00014,00016,00018,00020,00022,00024,00026,00028,00030,0002008200920000022202320242025JPY/tsuboGrade AGrade BAll GradeForecast18CBRE RESEARCH 2022 CBRE,INC.Intelligent InvestmentAsia Pacific Real Estate Market Outlook 2023|JapanVolume
101、 of new supply to affect vacancy ratesSince the start of 2022,demand has been on the rise in regional cities for reasons such as theestablishment of new regional offices,expansion of existing offices,and improvements to officeenvironments.While more cities are currently seeing increases in vacancy,s
102、uch rises tend to bethe result of new supply.The volume of take-up has actually increased compared to 2021.As with the three major cities(Tokyo,Osaka,and Nagoya),however,tenants are becoming muchmore selective with respect to office specifications.Since the pandemic,higher vacancy has meantthat tena
103、nts have more options at their disposal,while many companies have also recalibrated theiroffice space needs.As a result,buildings seen as too expensive for their location or grade haveattracted little interest.In contrast,properties offering better value have quickly secured newtenants to fill vacan
104、cies.Amid continued economic uncertainty,a major recovery in relocationdemand is unlikely.Future vacancy rates are therefore likely to be largely determined by thevolume of new supply in each city.Kanazawa,and Takamatsu have no new supply planned between 2023 and 2025(Figure 12),whilenew supply in b
105、oth Kyoto and Kobe is expected to amount to less than 2%of existing stock.Thevacancy rates in these five cities are therefore expected to decline gently(Figure 13).Regional CitiesSource:CBRE,Q3 2022.3.2%0.3%2.9%3.2%4.8%5.5%5.6%0.8%0.8%4.1%2.0%5.7%2.0%2.5%1.3%1.3%6.1%5.5%2.6%1.6%0.3%0.4%0.7%1.0%3.4%5
106、.5%0%4%8%12%16%TokyoOsakaNagoyaSapporoSendaiSaiatamaYokohamaKanazawaKyotoKobeHiroshimaTakamatsuFukuoka202320242025Figure 12:New supply as a ratio of total stock as of Q3 2022(All Grade)02 Office19CBRE RESEARCH 2022 CBRE,INC.Intelligent InvestmentAsia Pacific Real Estate Market Outlook 2023|JapanSapp
107、oro,Sendai,and Saitama are each projected to see new supply equivalent to around 6%ofexisting stock between 2023 and 2025(Figure 12).As of Q3 2022,Sapporo had the lowest vacancyrate of all 13 surveyed cities,at 1.0%.Due to strong call center demand and relocation needs drivenby redevelopment,the cit
108、y has managed to maintain an extremely low vacancy rate,even at theheight of the pandemic.Although new supply should push vacancy upward,the rate is projected toreach just 2.0%by Q4 2025.Sendais new supply is almost entirely concentrated in the period fromQ2 2023 to Q1 2024.Consequently,while the ci
109、tys vacancy rate is projected to rise to 4.0%in Q22024,it should fall back down to 2.2%by Q4 2025.With new supply scheduled for the period fromQ2 2023 to Q2 2024,Saitamas vacancy rate is forecast to rise by 2.2 points from its Q3 2022 levelto reach 4.4%by Q2 2024,after which it will decline to a pro
110、jected 3.6%in Q4 2025(Figure 13).Yokohama and Fukuoka are each projected to see new supply exceeding 10%of their current stockover the next three years(Figure 12),meaning that their vacancy rates will rise more than those ofother cities.With its new supply concentrated is 2023 and 2024,Yokohama can
111、expect its vacancyrate to spike by 5.0 points from its Q3 2022 level to reach 8.0%by Q3 2024,before falling oncemore as far as 5.9%by Q4 2025.With robust demand fueled by new office openings and upgrades,Fukuoka is the only market nationwide in which newly leased floor area has exceeded pre-pandemic
112、 levels for five straight quarters since Q3 2021.However,with new supply equivalent to 4to 5%of existing stock slated to be added every year for the next three years,its vacancy rate isset to increase by 5.8 points from current levels to reach 9.0%by Q4 2025(Figure 13).Regional Cities(cont.)Source:C
113、BRE,Q3 2022.Figure 13:All Grade vacancy rate forecast for Q3 2022 to Q4 202502 Office0%2%4%6%8%10%12%14%16%TokyoOsakaNagoyaSapporoSendaiSaitamaYokohamaKanazawaKyotoKobeHiroshimaTakamatsuFukuokaQ3 2022-Q4 2025Q3 2022Q4 202520CBRE RESEARCH 2022 CBRE,INC.Intelligent InvestmentAsia Pacific Real Estate M
114、arket Outlook 2023|JapanRentsfallin almostall citiesCBRE projects achievable rents for Q4 2025 to fall below Q3 2022 levels in nine of the 10 surveyedcities,with Takamatsu the only exception(Figure 14).In Takamatsu,the vacancy rate has been onthe decline since Q3 2021,and is expected to maintain tha
115、t trend,ensuring rents begin to climbfrom Q2 2024.With vacancy rates either rising or remaining stable in all other cities,rents areprojected to continue their slow descent.However,in those cities for which vacancy rates areprojected to begin to fall within the next three years,however,the pace of r
116、ent decreases shouldbegin to slow.Sapporo and Sendai already have low vacancy rates,which are expected to remainessentially unchanged through until Q3 2023.Rents in these two cities,therefore,will not begintheir decline until 2024,and will fall by less than in other locations.With vacancy rates expe
117、cted tospike more dramatically in Yokohama and Fukuoka,rents in these two cities there are projected tofall more significantly.Regional Cities(cont.)Source:CBRE,Q3 2022.Figure 14:All Grade rent forecast for Q3 2022 to Q4 2025(Index)02 Office859095100TokyoOsakaNagoyaSapporoSendaiSaitamaYokohamaKanaza
118、waKyotoKobeHiroshimaTakamatsuFukuokaQ3 2022-Q4 2025Q4 2025Q3 2022=100Retail03The Ginza highstreet market will continue to be driven primarily by demand from luxury goods brands in 2023.While high street rents appear to have bottomed and maintaining the low levels,they should begin to rise once again
119、 in Q4 2022 and continue to slowly increase thereafter.22CBRE RESEARCH 2022 CBRE,INC.Intelligent InvestmentAsia Pacific Real Estate Market Outlook 2023|JapanSource:Japanese Cabinet Office,CBRE,December 2022Figure 1:GDP&Private Consumption(Q-o-Q%)Retail sales showing signs of recovery,but inflation s
120、uppresses consumer sentimentWith the exception of February,when restrictive measures to prevent the spread of COVID-19 wereextended,monthly retail market indicators all showed y-o-y improvements over the course of 2022.Compared to the figures immediately prior to the pandemic,however,some indicators
121、,includingnationwide department store sales,remain well down on these levels.On the other hand,signs ofrecovery have been seen in such areas as inbound tourist demand as a result of the easing ofborder restrictions.Real GDP for Q2 2022 increased by 1.1%q-o-q,a higher growth compared to the-0.5%decli
122、ne seenin Q1 2022.Individual spending,which accounts for over half of Japans GDP,showed a 1.7%q-o-qincrease,up 2.7 points from the rise recorded in the previous quarter(Figure 1).In addition toincreased consumption of services including accommodation and dining as a result of the populacebeing able
123、to spend the May 2022 holidays without any restrictions on social or leisure activity,spending was also up for durables such as automobiles and semi-durables such as clothing.Total retail sales volume for October increased by 4.3%y-o-y(Figure 2),marking the eighthstraight months of positive y-o-y gr
124、owth,reflecting the normalization of economic activities.Nationwide department store sales also showed a 11.4%y-o-y increase in October,the thirdconsecutive month to see a double-digit percentage rise.In particular,increase in the flow ofpeople due to national travel support and other factors led to
125、 a success of local food fairs and otherevents.The market was also driven by the consistently robust luxury goods sector,as well asautumn-winter season clothing sales.Retail macroeconomic indicators in 2022Figure 2:Retail Sales&Department Store SalesSource:METI,Japan Department Stores Association,CB
126、RE,November 202203 Retail-0.1 0.3-0.5 1.2-0.5 1.1-0.2-1.7 0.1-1.3 3.2-1.0 1.7 0.1-2.0-1.00.01.02.03.04.0Q1Q2Q3Q4Q1Q2Q320212022GDPPrivate Consumption-150-0200-15-10-5051015201 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 022Retail SalesDepartment Stor
127、e Sales(RHS)y-o-y%y-o-y%23CBRE RESEARCH 2022 CBRE,INC.Intelligent InvestmentAsia Pacific Real Estate Market Outlook 2023|JapanSource:Japanese Cabinet Office,CBRE,December 2022.Figure 3:Consumer Confidence IndexMeanwhile,the consumer confidence index(households of two or more people;seasonallyadjuste
128、d)for November fell by 1.3 points from the previous month to 28.6 points,the thirdconsecutive month in which the index has fallen(Figure 3),largely due to the influence of risingcosts for daily necessities including electricity and food,as well as the concern for yet another risein number of positiv
129、e cases of COVID-19.All four categories making up the index(“overalllivelihood”,“income growth”,“employment”,and“willingness to buy durable goods”)worsened,with“willingness to buy durable goods”,in particular,recording its historical low.Inbound tourist demand showed signs of recovery due to the lif
130、ting of border restrictions.Foreignvisitors reached 498,600 in October,approx.2.5 times higher than in the previous month(Figure 4).By customer type,nationwide department stores saw a 335.2%y-o-y increase in inbound touristspending during the month.From October 11,2022,the Japanese government remove
131、d the cap ondaily foreign entrant numbers and also lifted the restriction on personal travel.Such measures werealso reflected in the sales figures.Further growth in inbound demand is expected,with the weakyen also a supporting factor.Retail macroeconomic indicators in 2022(cont.)Figure 4:Number of I
132、nbound Tourists in JapanSource:Japan National Tourism Organization(JNTO),CBRE,November 2022.03 Retail20253035401 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 02217,76616,71966,121139,548147,046120,430144,578169,800206,500498,6000100,000200,000300,000400,000500,
133、000600,0002022 People24CBRE RESEARCH 2022 CBRE,INC.Intelligent InvestmentAsia Pacific Real Estate Market Outlook 2023|Japan61.7%86.4%82.2%0%20%40%60%80%100%Q1 2022(n=60)Q2 2022(n=44)Q3 2022(n=45)IncreasedUnchangedDecreasedFigure 5:How did sales compare to the same period previous year?Ren
134、ts bottom out even as relatively large vacancies push up high street vacancyThe impact of the COVID-19 pandemic on the retail rental market lessened in 2022 in comparisonto previous years.Many existing tenants recorded strong increases in sales as a result of the lackof restrictions on consumers for
135、 the May and summer holiday periods(Figure 5).In addition to anumber of overseas brands opening their first Japanese stores,several moves aiming at expansionor upgrade were also noted.At the same time,however,some store closures caused by flaggingsales have been recorded.As was the case throughout t
136、he previous year,demand for storefront space from luxury brandsdrove leasing activity in Ginza in 2022.Several new developments in the high street area of Chuo-dori secured luxury goods brands as their tenants at landlords asking rents,which were roughlycommensurate to prevailing market levels.One l
137、uxury goods brand even signed a contract forspace in a property not due for completion for several years.The Q3 2022 Ginza high street vacancy rate rose by 1.3 points q-o-q to 7.7%(Figure 6).Whilerelocations necessitated by redevelopment filled some vacancies,the termination of a relativelylarge pop
138、-up store contract led to the q-o-q rise.Vacancy was also recorded in a separate premisefrom which the tenant has withdrawn.While the space has been attracting number of candidatereplacement tenants,the lease negotiations has been taking some time.2022 retail marketFigure 6:Ginza High Street Vacancy
139、 Rates Starting this quarter(Q3 2022),vacancy rate surveys will no longer be restricted to ground floor properties for which tenant demand is highest,but will instead cover all units for lease,including those on the ground floor.The data is retroactively corrected.Source:CBRE,Q3 2022.03 RetailQ3 202
140、1Q4 2021Q1 2022Q2 2022Q3 2022Ginza7.4%6.5%6.4%6.4%7.7%These are the result of CBREs quarterly survey.The survey targets retailers with street-level stores in major retail areas.Source:CBRE,November 2022.25CBRE RESEARCH 2022 CBRE,INC.Intelligent InvestmentAsia Pacific Real Estate Market Outlook 2023|
141、JapanDue to the challengin conditions created by the pandemic,no high street rent tabulations were made in Q1 2020.This was a result of the fact that rent calculations were rendered problematic by the significant decrease in the number of new contracts signed during this period.Source:CBRE,Q3 2022.2
142、30,000235,000240,000245,000250,000255,000260,000Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q320022Figure 7:Ginza High Street Rents(JPY/tsubo)Ginza high street rents,which had risen steadily from 2017 to 2019,fell between 2020 and H1 2021as a result of restrictive measures to contain the pandemic.After b
143、ottoming in Q3 2021,however,they have maintained the same level through to Q3 2022(Figure 7).Rents have also reached thetrough in areas dominated by domestic retailers,where weak demand previously forced rent levelsdownward.Among the luxury brands displaying an interest in opening new stores in the
144、Ginza area,some haveshown a willingness to pay the high rents demanded by an extremely rare prime property locatednear the Ginza 4-chome intersection.For this reason,prime rents for Q3 2022 remained unchangedat JPY 400,000 per tsubo for the 28th consecutive quarter(Figure 8).As was the case in thepr
145、evious year,strong demand for store space continues to be seen from high-end wristwatchretailers and jewelry brands,all of which continue to enjoy strong sales.2022 retail market(cont.)Figure 8:Tokyo Prime Rents(Ginza)(JPY/tsubo)Source:CBRE,Q3 2022.03 RetailQ3 2021Q4 2021Q1 2022Q2 2022Q3 2022Ginza40
146、0,000400,000400,000400,000400,00026CBRE RESEARCH 2022 CBRE,INC.Intelligent InvestmentAsia Pacific Real Estate Market Outlook 2023|JapanLuxury brands set to drive market;many retailers look to expand floor space or improve locationThe Ginza rental market will continue to be primarily driven by demand
147、 from luxury brands in 2023.Recent quarters have seenseveral luxury brands,who submitted tenders for a new high street development but missed out on securing a lease,begin to searchfor new premises.There are also luxury brands looking to relocate aiming at expansions and/or upgrades.Elsewhere,demand
148、 has been seen from jewelry and second-hand goods retailers,as well as from showrooms,all of which havethrived during the pandemic.These include retailers without a street-level presence in the Ginza area as well as others who had tovacate their current premises for redevelopment.Among the showroom
149、operators looking for new space are several retailers sellingluxury goodsand one group looking to combine a showroom with a service store using its own products.Many of the retailers,regardless of industry,hoping to find store space in the Ginza area are counting on a recovery in inboundtourist dema
150、nd.The significant loosening of border restrictions includes the lifting of the ban on individual travel,which hadaccounted for 76.6%of all foreign visitor numbers prior to the pandemic,while the weak yen has boosted foreign tourists spendingpower.This should act as a catalyst to spark demand over t
151、he course of 2023,especially for big-ticket items.At the same time,the rising cost of interior store fit-outs is likely to lead to more cases in which landlords offer rent-free periods of upto several months in order to attract new tenants.Delays in procuring building supplies have already led some
152、owners to adoptflexible approaches including delaying contract start dates.Elsewhere,comparatively large units are likely to be subdivided intosmaller units to suit retailer needs.2023 retail demand03 Retail27CBRE RESEARCH 2022 CBRE,INC.Intelligent InvestmentAsia Pacific Real Estate Market Outlook 2
153、023|JapanRents to increase by 0.6%q-o-q in Q4 2022 and continue climbing slowly thereafterAfter peaking in Q2 2016,Ginza high street rents fell for a short period before bottoming in Q3 2017(Figure 9).Rents then remained unchanged for some time,with small quarterly increases observedin both Q4 2018
154、and Q3 2019.The impact of the COVID-19 pandemic,however,meant that highstreet rents fell by 6.4%between the start of 2020 and Q3 2021.Since then,they have remainedunchanged for four straight quarters through to Q3 2022,where they stood at JPY 241,500 pertsubo.Rents now appear to have reached the tro
155、ugh,with a 0.6%q-o-q increase projected for Q4 2022set to bring rents up to JPY 243,000.Recent months have seen several luxury goods retailers signnew leases for multiple available properties in superior locations within the Ginza area.Contractedrents have either matched landlords asking rates(and m
156、arket rates)or have even exceededmarket levels as a result of competition between retailers.In high street areas further from the center of the district,where several vacancies are available,anumber of new lease contracts have been signed,while others are still in the negotiation phase.Rents in some
157、 cases have exceeded current market levels and are matching pre-pandemic rents.Further lease signings for such properties are set to increase the upward pressure on rents,whichis behind CBREs expectation that rents will reach JPY 243,000 per tsubo by Q4 2022.OutlookSource:CBRE,Q3 2022.Figure 9:Ginza
158、 Hight Street Rent Forecast(JPY/tsubo)Q4 2021 To Q3 202303 Retail240,000242,000244,000246,000248,000250,000252,000254,000256,000258,000260,000Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3200224Forecast28CBRE RESEARCH 2022 CBRE,INC.Intelligent
159、InvestmentAsia Pacific Real Estate Market Outlook 2023|JapanThis increase in demand is underpinned by a robust appetite for big-ticket items among domestic consumers.Thisis evidenced by the fact that the“artwork,jewelry and precious metals”category in the nationwide department storesales figures for
160、 September 2022 recorded its 20th consecutive monthly y-o-y increase,extending its record streak.Inbound tourist demand,which completely disappeared during the pandemic,is also expected to continue itsrecovery on the back of the lifting of restrictions on individual travel.Underpinned by this recove
161、ry in inbound tourist demand,rents are projected to rise by 3.3%over the next two yearsin comparison to the levels seen in Q3 2022,which would still represent a 3.3%decline from the rents observedimmediately prior to the pandemic in Q4 2019.Prime rents,which are defined as those for extremely exclus
162、iveproperties near the Ginza 4-chome intersection,are anticipated to remain unchanged over the same period,asdemand is consistently high from luxury brands for store space in rarely available real estate.Outlook(con.)03 RetailLogistics04Unprecedented volumes of new supply is expected across Japan in
163、 2023,due to the greater focus placed on logistics properties by developers.As a result,vacancy rates are expected to rise in all four metropolitan areas,despite continued robust tenant demand for logistics space.30CBRE RESEARCH 2022 CBRE,INC.Intelligent InvestmentAsia Pacific Real Estate Market Out
164、look 2023|JapanSource:CBRE,Q3 2022.5.28.41.44.79.416.33.27.40%5%10%15%20%25%0300,000600,000900,0001,200,0001,500,000200002220232024Greater TokyoGreater OsakaGreater NagoyaGreater FukuokatsuboFigure 1:New Supply and Vacancy RateVacancy rate set to increase in all four
165、 major metropolitan areas due to increased supplyNew Large Multi-Tenant(LMT)logistics facility supply for Greater Tokyo is projected to reach arecord-high 913,000 tsubo in 2023.A further 653,000 tsubo slated for 2024 will ensure that highlevels of new supply will be maintained for the four-year peri
166、od from 2021 to 2024.While tenantdemand remains robust,net absorption will be unable to match the high volumes of new supply,leading to a projected vacancy rate of 8.1%by the end of 2023.This figure would exceed the mostrecent vacancy rate peak of 6.9%recorded in 2015 and would mark the highest vaca
167、ncy rate since2010s figure of 11.7%.The sharp increase in new LMT stock is a result of the increased focusplaced on logistics properties by developers in response to the lack of supply seen between 2019and 2021,when the pandemic led to a sharp spike in demand.Many developers also commencedthe constr
168、uction of facilities in regional cities during the same period.New supply records are likelyto be broken in Greater Nagoya and Greater Fukuoka in 2023,and in Greater Osaka in 2024.Whilethe vacancy rate will differ by area,all four metropolitan areas are projected to see the supply-demand balance loo
169、sen in comparison to 2022.Projected changes to effective rents will reflect the level of vacancy in each region.Greater Tokyoeffective rents are projected to drop by 0.4%y-o-y in 2023,which would be the first y-o-y declinesince 2016s fall of 2.2%.In Greater Nagoya,where effective rents have stayed r
170、elatively stable at ayearly average increase of 0.3%in the five years between 2018 and 2022,rents are projected toremain essentially unchanged.On the other hand,Greater Osaka and Greater Fukuoka areprojected to see gradual rises in effective rents,as vacancy rates remain relatively low and supplyin
171、central locations remain insufficient.However,new supply in underdeveloped locations andconcentration of supply in specific locations are being observed in all four major metropolitan areas.It is possible that rents may fall below CBREs estimates,should such properties take longer thanexpected to se
172、cure tenants.Logistics Market -SummaryFigure 2:Effective Rent Index and Y-o-Y Change 4,540 4,490 4,140 4,200 3,590 3,600 3,380 3,480-2%0%2%4%6%8%10%2,0002,5003,0003,5004,0004,5005,000200224Greater TokyoGreater OsakaGreater NagoyaGreater FukuokaSource:CBRE,Q3 2022.04 LogisticsNe
173、w SupplyEffective Rent Index(JPY/tsubo/month)Effective Rent Growth(Y-o-Y)Vacancy RateForecastForecast31CBRE RESEARCH 2022 CBRE,INC.Intelligent InvestmentAsia Pacific Real Estate Market Outlook 2023|JapanVacancy rate exceeds 5%in 2022 for the first time in four years amid significant new supplyHaving
174、 already risen sharply from 0.5%at the end of 2020 to 2.3%by the end of 2021,the GreaterTokyo vacancy rate continued to edge upwards in 2022,reaching 5.2%in Q3 2022.This marked thefirst time since Q3 2018 that the Greater Tokyovacancy rate had crossed the 5%threshold.The major factor behind the risi
175、ng vacancy rate is the large number of new LMT projects thatemerged in response to the insufficient supply seen between 2019 and 2020,and due to logisticsfacilities being prioritized by investors and developers for the stability they provided during thepandemic.Many of these projects started to come
176、 on stream from H2 2021 onward,keeping newsupply at elevated levels.As of Q3 2022,total cumulative new supply for 2022 stood at 551,000tsubo,a 22%increase over the same period of the previous year.Net absorption over the sametime frame was 385,000 tsubo,a rise of 10%y-o-y.Even after the spike in dem
177、and triggered by thepandemic dissipated,logistics operators and e-commerce businesses continued to display robustdemand for logistics facilities.With new supply outstripping net absorption,however,the vacancyrate continues to rise.This loosening of the supply-demand balance has led to the stagnation
178、 of leasing activity.As of Q32022,the pre-leasing rate for properties due for completion within the next 12 months stood at just18.2%,significantly down from the peak pre-leasing rate of 62.3%registered in Q3 2020.Whileoccupancy rate at completion for new properties was 97%in 2020,the equivalent fig
179、ure for thefirst three quarters of 2022 was 60%(Figure 3).The primary reason behind the loss of leasingmomentum is the abundance of options tenants now enjoy.Unlike in 2019 or 2020,when thesupply-demand balance was extremely tight,there is no imperative for tenants to rush into signingleases.Another
180、 contributing factor is that logistics operators do not currently need to proactivelysecure excess floor space,as consignors are becoming more cautious as a result of economicuncertainty caused by rising costs and other reasons.Greater Tokyo*Occupancy rate at completion for 2022 is as of Q3Source:CB
181、RE,Q3 2022.0%10%20%30%40%50%60%70%80%90%100%-200,000-150,000-100,000-50,000050,000100,000150,000200,00020000022Excess supply(new supply-net absorption,LHS)Occupancy rate at completion(RHS)tsuboFigure 3:Excess Supply/Demand and Occupancy Rate at Completion(
182、Greater Tokyo)04 LogisticsExcess SupplyExcess Demand32CBRE RESEARCH 2022 CBRE,INC.Intelligent InvestmentAsia Pacific Real Estate Market Outlook 2023|JapanSource:CBRE,Q3 2022.Figure 4:Supply/Demand Balance and Vacancy Rate(Greater Tokyo)Vacancy rate projected to rise further in 2023,reaching 8.1%in Q
183、4 2023New supply for 2022 is projected to reach around 681,000 tsubo,an 8.8%increase from theprevious year.2023 is forecasted to see the completion of a record-high 913,000 tsubo of new floorspace,while a further 653,000 tsubo of new supply is projected to come on stream in in 2024.Thiswould mark fo
184、ur consecutive years of historically high levels of new supply(Figure 4).Withhousehold online spending in Japan continuing to rise even as the pandemic abates,demand forlogistics facilities in the Greater Tokyo area should remain robust.The continued growth in netabsorption,however,will not be suffi
185、cient to fill such abundant supply.A period of four successiveyears of vacancy rate increase due to excess supply would mark the first such occurrence of thisphenomenon since CBRE began collecting LMT statistics in 2004.CBRE expects the Greater Tokyo vacancy rate to remain unchanged on a q-o-q basis
186、 at 5.2%in Q42022.However,it should rise to another level from next year,reaching 8.1%by Q4 2023.Divided byarea,the most significant spikes in vacancy are likely to be seen in the Route 16 and Ken-o-doareas,where nearly 90%of new supply for 2023 will be concentrated(Figure 5).With the period ofplent
187、iful new supply set to continue through to 2024,CBRE projects the Greater Tokyo vacancyrate to peak at 8.4%in Q4 2024.While potential delays in the delivery of construction materials andrising material costs may push back the completion dates of some projects and keep the vacancyrate slightly below
188、CBREs projections,these factors should make little difference to the largesupply pipeline that will be seen over the mid-term.As a result,tenants are likely to be much moreselective when considering signing new leases,leading to starker differences in occupancy ratebetween individual properties base
189、d on such factors as location,specifications,and ownersoperational competence.Should properties such as the particularly large new facility planned forthe Kanagawa area,where supply has already been plentiful and the vacancy rate is on the rise,take longer than predicted to lease their units,this co
190、uld push the overall Greater Tokyo vacancyrate up above CBREs projections.Greater Tokyo(cont.)Figure 5:New Supply and Vacancy Rate(Greater Tokyo,by Area)9.5%4.6%3.6%3.6%5.6%9.0%4.8%11.3%0%4%8%12%16%20%0200,000400,000600,000800,0001,000,00020002020224Tokyo Bay AreaGai
191、kando AreaRoute 16 AreaKen-O-do AreatsuboSource:CBRE,Q3 2022.04 LogisticsNew SupplyVacancy RateForecast5.2%8.4%0%2%4%6%8%10%0200,000400,000600,000800,0001,000,000200002220232024New SupplyNet AbsorptionVacancy RatetsuboForecast33CBRE RESEARCH 2022 CBRE,INC.Intelligent
192、 InvestmentAsia Pacific Real Estate Market Outlook 2023|JapanThe abundance of new supply is also exerting an impact on the vacancy rate of existing properties.While the vacancy rate for existing facilities(at least one year old)stood at a relatively low 1.7%asof Q3 2022,it has been steadily climbing
193、 ever since Q1 2021 when it recorded an all-time low of0.2%.Moreover,there are more cases observed recently where it has taken longer to fill vacanciesfor both existing and new properties.Given that many facilities completed in Q1 2022 still containvacancies,the vacancy rate for existing facilities
194、is likely to increase further when these facilitiesbecome more than one year old in Q2 2023.Greater Tokyo effective rents projected to fall slightly due to increase in new supply in Ken-o-doGreater Tokyo effective rents are projected to reach JPY 4,540 per tsubo in Q4 2022,which wouldrepresent a 1.6
195、%y-o-y increase(Figure 6).This increase is largely due to the fact that the majorityof 2022s new facilities have been concentrated in comparatively high-rent areas.By Q4 2023,effective rents are expected to slip by 0.4%y-o-y to JPY 4,520 per tsubo,as a relatively largeproportion of new supply in 202
196、3 is slated to be concentrated in the lower-rent Ken-o-do area.CBRE projects effective rents to fall by a further 0.7%y-o-y to JPY 4,490 by Q4 2024.While abundant new supply should prevent rents from rising across Greater Tokyo as a whole,CBRE does not anticipate any significant decline in rents.Tha
197、t said,some disparities are expectedto emerge between different areas.With available properties in the Tokyo Bay area continuing tobe limited,rents are expected to continue to rise in this location,while they should remainrelatively stable in the Gaikando and Route 16 areas.Any sub-areas featuring s
198、ignificant newsupply or located adjacent to those areas,however,or specific properties struggling to find tenants,may see effective rents decline.In the Ken-o-do area,vacancy rates are on the rise due to newconstruction in the outer part of the area,raising the probability that rents will fall.Great
199、er Tokyo(cont.)Source:CBRE,Q3 2022.4,540 4,490 7,570 7,960 5,170 5,200 4,520 4,510 3,610 3,500 3,0004,0005,0006,0007,0008,0009,000Q1 2017Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018Q4 2018Q1 2019Q2 2019Q3 2019Q4 2019Q1 2020Q2 2020Q3 2020Q4 2020Q1 2021Q2 2021Q3 2021Q4 2021Q1 2022Q2 2022Q3 2022Q4 2022Q1
200、 2023Q2 2023Q3 2023Q4 2023Q1 2024Q2 2024Q3 2024Q4 2024Greater Tokyo Tokyo Bay AreaTokyo Bay AreaGaikando AreaRoute 16 AreaKen-O-do AreaJPY/tsubo/monthFigure 6:Effective Rent Index(Greater Tokyo,by Area)04 LogisticsForecast34CBRE RESEARCH 2022 CBRE,INC.Intelligent InvestmentAsia Pacific Real Estate M
201、arket Outlook 2023|JapanSource:CBRE,Q3 2022.1.4%4.7%0%4%8%12%16%20%24%28%050,000100,000150,000200,000250,000300,000350,000200002220232024New SupplyNet AbsorptionVacancy RatetsuboFigure 7:Supply/Demand Balance and Vacancy Rate(Greater Osaka)Abundant supply to absorb d
202、emand;rents to rise but performance will diverge by areaThe vacancy rate for Greater Osaka stood at 1.7%as of Q3 2022,with a similarly low rate ofbetween 1%and 2%expected to be maintained in Q4 2022.The major reason for low vacancy is thepaucity of new supply,with 2022 witnessing the addition of onl
203、y 58,000 tsubo,well below theyearly average over the previous five years of 203,000 tsubo.However,2023 is slated to see some226,000 tsubo of new supply,with 2024 set to see an even more significant 315,000 tsubo.While adecent amount of new stock can be expected to be taken up,particularly as a resul
204、t of pent-upactivity following pandemic-related restrictions in 2022,the vacancy rate is still projected to climbas high as 4.7%by Q4 2024.With a substantial portion of new supply planned for relativelyundeveloped peripheral areas in Shiga,Nara,and southern Osaka Prefectures,tenants are likely tobe
205、wary about committing to such emerging regions.That said,some units have already securedtenants,with demand expected to further increase gradually.CBRE projects effective rents to increase by 0.7%y-o-y in both 2023 and 2024.Although newfacilities in peripheral areas will suppress average rents,the e
206、xtreme lack of vacant space incentral areas should ensure that rents continue to rise gradually.Several properties equipped withrampways are scheduled for completion in central Osaka,with the high rents typically commandedby such facilities also set to influence overall rental performance in the com
207、ing years.Greater Osaka04 LogisticsForecast35CBRE RESEARCH 2022 CBRE,INC.Intelligent InvestmentAsia Pacific Real Estate Market Outlook 2023|JapanSource:CBRE,Q3 2022.9.4%16.3%0%4%8%12%16%20%040,00080,000120,000160,000200,000200002220232024New SupplyNet AbsorptionVacan
208、cy RatetsuboFigure 8:Supply/Demand Balance and Vacancy Rate(Greater Nagoya)Supply chain reforms boost logistics demand but may fail to fully absorb expanding supplyWhile the Greater Nagoya vacancy rate stood at 11.0%in Q3 2022,well above that of the othermajor metropolitan areas,net absorption for 2
209、022 is projected to exceed 130,000 tsubo.Logisticsdemand in the area is being driven by manufacturers recalibrations of their intermediate materialstorage needs,as a means of overcoming the supply chain challenges caused by the pandemic.With new supply reaching 171,000 tsubo in 2022,and projected to
210、 record another 190,000 tsubo in2023,CBRE projects the vacancy rate will rise as high as 16.4%by Q4 2023 and will maintain thosehigh levels through to the end of 2024.However,effective rents are expected to remain essentiallyunchanged,with a 0.3%rise projected over the next two years.The lack of hig
211、h-quality propertiesthroughout Greater Nagoya is leading to this phenomenon of stable rents amidst rising vacancyrates.While rents may slip somewhat in areas with abundant supply,these declines should beoffset by high rents being maintained in central areas with few available spaces.Rents to continu
212、e to rise but pace should slowBetween Q2 2019 and Q2 2022,the Greater Fukuoka area maintained a vacancy rate of 0.0%,withall seven new facilities completed during that period coming on stream fully occupied.Whilesignificant new supply is slated to be completed for the period between 2022 and 2024,st
213、rong netabsorption is anticipated.With a series of facilities due for completion in newly-developed areas,however,it is likely that vacancies will take longer to fill than previously.CBRE projects thevacancy rate to rise to 7.4%by Q4 2024.Effective rents are expected to show the most significantincr
214、ease among the major metropolitan areas,at+1.8%y-o-y projected for 2023 and a further+1.2%in 2024.While vacancies should appear over the next few years,the overall paucity of stock in thearea means that these new developments will not represent an excess of supply.Nevertheless,thepace of effective r
215、ent rises is likely to slow in comparison to the+4.0%y-o-y projected for 2022.Greater NagoyaFigure 9:Supply/Demand Balance and Vacancy Rate(Greater Fukuoka)3.2%7.4%0%3%6%9%12%15%020,00040,00060,00080,000100,000200002220232024New SupplyNet AbsorptionVacancy RatetsuboS
216、ource:CBRE,Q3 2022.04 LogisticsGreater FukuokaForecastForecastInvestment05Commercial real estate transaction volume in Japan for 2022 is expected to be slightly lower than the previous years level.Nevertheless,expected yields have continued to decline,indicating that investor appetite remains stable
217、.Some investors have become more selective amid overseas interest rate hikes and concerns over a possible recession in US and Europe.However,the BoJ appears unlikely to tighten its monetary policy in the short term,and appetite for Japan real estate looks set to remain robust in 2023.37CBRE RESEARCH
218、 2022 CBRE,INC.Intelligent InvestmentAsia Pacific Real Estate Market Outlook 2023|JapanTransactions of at least JPY 1 billion,excluding acquisitions by J-REITs at IPO.Source:Real Capital Analytics,CBRE,Q3 2022.01,0002,0003,0004,0005,000200202021Q1-Q3 2021Q1-Q3 2022Domestic(J-REITs)Domesti
219、c(Others)OverseasJPY bnFigure 1:Transaction volume by investor typeTransaction volume for first three quarters of 2022 falls by 13%y-o-yDomestic investment shrinks while foreign investment surgedCumulative transaction volume for 2022 for the first three quarters in 2022(transactions of JPY 1billion
220、or more,Figure 1)fell by 13%y-o-y to JPY 2,346 billion.While foreign investment surged by54%y-o-y,transaction volume by J-REITs and other domestic investors fell by 46%and 22%,respectively.There are three major factors behind the decline in investment volume.The first is weaker J-REITshare prices,wh
221、ile the second is a lack of properties available for sale.With financing conditionsstrongly positive,potential sellers chose to refinance if they saw that they would not get theirintended price.The third and final factor is that differences in asking prices and what potentialinvestors were willing t
222、o pay resulted in longer negotiation periods and delayed contract signings.Despite the drop in transaction volume,investor appetite remains robust.The results of CBREsTankan Survey,conducted quarterly among domestic investors(Tokyo Grade A buildings,Figure2),show that while the diffusion index(DI)fo
223、r“stance on investment and loans”worsenedsignificantly in 2020 as a result of the pandemic,it has been improving steadily ever since.Whilethe DI worsened again in Q3 2022,this was the result of fewer respondents indicating that they hadaccelerated investment and more respondents indicating that they
224、 had maintained the status quo.It appears that an increasing number of investors adopted a wait-and-see approach over concernsof a potential tightening of Japans fiscal policy with the expected transition to a new Governor ofthe BoJ.The largest transaction recorded in the first nine months of 2022 w
225、as GICs purchase of aportfolio of hotels and golf courses previously owned by Seibu Holdings for JPY 147.1 billion.Sevenof the top ten transactions by volume were by foreign investors,including the purchase of an officeblock for over JPY 100 billion.Investment market in 2022Figure 2:“Stance on inves
226、tment and loans“for Tokyo Grade A office buildings 59Q42020Q12020Q22020Q32020Q42021Q12021Q22021Q32021Q42022Q12022Q22022Q3CBRE Tankan Survey(DI)Current quarter assessmentSix months outlookDI subtracts the ratio(%)of respondents that expected a contraction from the ratio(%)of respondents th
227、at expected an“expansion.”Source:CBRE,Q3 2022.05 Investment38CBRE RESEARCH 2022 CBRE,INC.Intelligent InvestmentAsia Pacific Real Estate Market Outlook 2023|JapanTransactions of at least JPY 1 billion,excluding acquisitions by J-REITs at IPO.Source:Real Capital Analytics,CBRE,Q3 2022.-24%42%0%-55%-15
228、%-61%02505007501,0001,2501,500OfficeResidentialRetailIndustrialHotelOthersQ1-Q3 2021Q1-Q3 2022JPY bnFigure 3:Transaction volume by sectorForeign investors complete several major acquisitionsTotal cumulative transaction volume data divided by asset type*(comparison of first threequarters in 2022 and
229、2022,Figure 3)reveals that only the residential sector showed an y-o-yincrease(up 42%to JPY 435.0 billion),which was up 7%y-o-y.Foreign investors are responsiblefor 68%of this cumulative transaction volume,with the number of transactions of above JPY 10billion,primarily for portfolios,comfortably su
230、rpassing last years figures.The largest y-o-y decrease was in the logistics sector(down 55%to JPY 211.0 billion),followed bythe office sector(down 24%to JPY 999.0 billion).The fall in logistics investment volume was dueto the 63%decrease in acquisitions by J-REITs.Amid a shortage of available proper
231、ties,transaction volume by foreign investors was also down 68%.While foreign investment in officeswas unchanged from the previous year,transaction volume by domestic investors including J-REITs declined.It should be noted,however,that one deal currently being processed by a domesticinvestor and expe
232、cted to be closed in Q4 2022 would be one of the largest ever in Japan.Shouldthis transaction be completed,office transaction volume for 2022 would record a y-o-y increase forthe third consecutive year.Fall in investment by J-REITs largely a result of sluggish share pricesPoor performance by J-REIT
233、shares has meant that capital raised through public equity offeringsso far in 2022 is 52%below the previous year,which has led to a drop in J-REIT transaction volume.Total cumulative transaction volume through the first three quarters of 2022 stood at JPY 529.0billion.Should the final figure for the
234、 year fail to exceed JPY 1 trillion,it would represent the lowestmark since 2012.The largest drop in share prices for the year to end of September has been seenin the logistics sector(down 18.5%,Figure 4).Relatively low dividend yields(as a result of shareprice outperformance in the previous years)a
235、ppear to have deterred investors on the back ofconcerns for potential monetary tightening.As a result,total cumulative investment volume by J-REITs in logistics facilities is currently down by over 60%from the previous year.Investment market in 2022(cont.)Figure 4:J-REIT stock price by asset type-40
236、%-30%-20%-10%0%10%20%30%TSE REITOfficeRetailResidentialIndustrialHospitalityDiversifiedChange20202021Q1-Q3 2022Source:Datastream,CBRE,October 2022.05 Investment39CBRE RESEARCH 2022 CBRE,INC.Intelligent InvestmentAsia Pacific Real Estate Market Outlook 2023|JapanTransactions of at least JPY 1 billion
237、,excluding acquisitions by J-REITs at IPO.Source:Real Capital Analytics,CBRE,November 2022.-40%-20%0%20%40%1,0002,0003,0004,0005,00020002120222023Transaction volume(LHS)Y-o-Y(RHS)JPY bnFigure 5:Real estate investment volumeHeightened uncertainty set to drive more capital into J
238、apanese real estate Despite total investment volume for the first three quarters of 2022 falling by over 10%y-o-y,investors expected yields(page 41,Figure 9)continued to drop,indicating that many buyers stillhave a robust investment appetite.With several large deals in the pipeline for Q4 2022,total
239、transaction volume for the calendar year is expected to be only 3%below that of 2021(Figure 5).Interest rate hikes in overseas markets and worries over a possible recession in US and Europehave caused some foreign investors to adopt a more cautious approach since around Q3 2022.Despite these concern
240、s,the Japanese real estate investment market is set to remain active in 2023.This is because of several factors.Firstly,the Japanese economy is projected to continue on itsslow path to recovery,driven by both consumer spending and corporate capital investment.Secondly,with loose monetary policy like
241、ly to be maintained in Japan for the time being,cap ratespreads for real estate investment can be expected to remain higher than in most other countries(Figure 6).Finally,real estate funds have 30%more money to invest in Asia Pacific than they didprior to the pandemic in 2019.Armed with ample capita
242、l,they remain keen to invest,with Japanseen as a market of significant interest.CBRE forecasts investment volume in 2023 to see a few percent drop compared to 2022.With afew foreign investors adopting a more selective attitude,domestic investors have recently beenseen to prevail in bidding for relat
243、ively large projects,and are likely to continue to be the primedrivers in 2023.That said,significant new supply is slated mainly in the Greater Tokyo area forboth the office and logistics sectors.With fewer properties from which cash flow growth can beanticipated,investors may become more selective
244、overall.Also,while 2022 saw the second largestvolume of large-scale deals of JPY100bn or higher,2023 is likely to see fewer such transactionsgiven the total amount of speculated deals in the pipeline so far.Investment market in 2023Figure 6:Prime Office Yield relative to local 10-year Government Bon
245、d Rate-2%-1%0%1%2%3%4%5%TokyoShanghaiSydneySingaporeSeoulHong KongSpreadPrime office cap rate10-y Govt bond yieldSource:Datastream,CBRE,Q3 202205 InvestmentForecast40CBRE RESEARCH 2022 CBRE,INC.Intelligent InvestmentAsia Pacific Real Estate Market Outlook 2023|JapanSource:CBRE,November 2022.2%3%4%5%
246、6%Office(GradeA)Logistics(Multi-tenant,Tokyo Bay Area)Retail(Ginza,High-street)Q1 2007-Q3 2022Q4 2022 EQ4 2023 EFigure 7:Tokyo prime yields outlookMore selective approach essential as the rental market weakensWhile prime properties offering stable cash flow will remain popular among investors,few su
247、chassets will be available for investment.Furthermore,the number of properties offering cash flowgrowth is likely to be less than in 2022.Investment decisions will therefore need to be based onmore than just a consideration of sector and/or grade,and should require considered analysis on acase-by-ca
248、se basis.CBREs projections for Tokyo prime asset transactional yields for Q4 2023 areincreases of 5 bps y-o-y for both offices and logistics,and a decrease of 5 bps y-o-y for retail(Figure 7).Significant new supply over the next three years will push up the Tokyo office market vacancy rate,and lead
249、to further decline in market rents.Less competitive properties may well see theirtransactional yields increase.Nevertheless,investor appetite for office properties should remainsteady in 2023.With more liquidity than other sectors,the office sector offers greater opportunitiesfor core and value-adde
250、d investment.In this environment,investors will be looking to invest inproperties which will meet the occupier needs for upgrading or consolidation,which is seen to bethe prime driver of the office leasing market.Analysis of factors such as locational advantages,building age,and available amenities
251、will become increasingly important in the process of propertyselection.Logistics facilities are popular among investors as defensive assets which provide stable cash floweven in times of economic uncertainty.Nonetheless,Greater Tokyo logistics market rents areforecast to fall by 0.4%y-o-y in 2023 on
252、 the back of significant new supply.As such,a moreselective approach with respect to location and building specifications will become increasinglyimportant in this asset type as well.This more selective approach may push up transactional yieldsfrom their current record low levels.Investment strategy
253、 in 2023Figure 8:Rental outlook by major asset type in Tokyo-7%-6%-5%-4%-3%-2%-1%0%1%2%Office(GradeA)Logistics(Multi-tenant,Greater Tokyo)Retail(Ginza,Hight-street)20212022 E2023 ESource:CBRE,Q3 202205 InvestmentChg y-o-y41CBRE RESEARCH 2022 CBRE,INC.Intelligent InvestmentAsia Pacific Real Estate Ma
254、rket Outlook 2023|JapanThe residential sector,which remains popular among investors owing to its stable cash flow,hasseen expected yields fall by between 30 and 38 bps since 2020,behind only to the logistics sectorwhose expected yields fell 45 bps(Figure 9).In central Tokyo,a major transaction of on
255、e buildingthis year recorded a transactional yield of below 3%.While investor appetite appears set to remainstrong in 2023,vendors are now looking to sell at higher price points,in some cases above thosepotential buyers are willing to consider.On this backdrop,further transactional yield compression
256、may be limited.Amid high expectations for a rebound in inbound demand following the lifting of border restrictionsin October 2022,the retail and hotel sectors are attracting stronger investor interest.Properties insome retail districts have now either matched pre-pandemic expected yields in Q3 2022(
257、Ginza inTokyo,Midosuji in Osaka,Tenjin-Nishi in Fukuoka)or even fallen below those levels(Omotesandoin Tokyo,Sakae in Nagoya).Turning to the hotel sector,total cumulative Japanese guest numbersas of October 2022 had recovered to 88%of the figure from the same month in 2019.With thegradual increase i
258、n foreign guest numbers,further improvements in hotel cash flow can beanticipated.However,some cities have seen new hotels built even during the pandemic,followingplans initially put in place several years previously.Investor interest may therefore differ dependingon area and hotel type.Investment i
259、n residential assets set to remain robust in 2023;retail and hotels to garner more attention on back of recovering tourist demandNote:Average figure of the median of lowest/highest yield each.Source:CBRE,Q3 20223%4%5%6%7%8%Q22007Q22008Q22009Q22010Q22011Q22012Q22013Q22014Q22015Q22016Q22017Q22018Q2201
260、9Q22020Q22021Q22022Office(Otemachi,Tokyo)Retail(Ginza,Tokyo)Industrial(Tokyo bay area)Hotel(Tokyo 5 wards,management contract)Studio-type apartment(Tokyo 5 wards)Multi-room apartments(Tokyo South,Tokyo East)Figure 9:Tokyo expected NOI yields05 Investment42CBRE RESEARCH 2022 CBRE,INC.Intelligent Inve
261、stmentAsia Pacific Real Estate Market Outlook 2023|JapanMEMO:43CBRE RESEARCH 2022 CBRE,INC.Intelligent InvestmentAsia Pacific Real Estate Market Outlook 2023|JapanMEMO:Copyright 2022.All rights reserved.This report has been prepared in good faith,based on CBREs current anecdotal and evidence based v
262、iews of the commercial real estate market.Although CBRE believes its views reflect market conditions on the date of this presentation,they are subject tosignificant uncertainties and contingencies,many of which are beyond CBREs control.In addition,many of CBREs views are opinion and/or projections b
263、ased on CBREs subjective analyses of current market circumstances.Other firms may have different opinions,projections and analyses,andactual market conditions in the future may cause CBREscurrent viewsto later beincorrect.CBREhas noobligation to update its viewsherein ifits opinions,projections,anal
264、yses ormarket circumstances later change.Nothing in this report should be construed as an indicator of the future performance of CBREs securities or of the performance of any other companys securities.You should not purchase or sell securitiesof CBRE or any other companybased on the views herein.CBR
265、E disclaims all liability forsecurities purchased or sold based on information herein,and by viewing this report,you waive all claims against CBRE as well as against CBREs affiliates,officers,directors,employees,agents,advisers and representatives arising out of the accuracy,completeness,adequacy or
266、 your use of theinformation herein.Hiroshi OkuboManaging DirectorHead of RContactsYuji IwamaDirectorOffice Team Leader/Data Yoshitaka IgarashiDirectorOffice Team Leader/HSayuri KanekoAnalystOffice TAsukaHondaDirectorInvestment Team LKazuko TakahashiSenior DirectorIndustrial Team LChinatsu HaniDirectorIndustrial Team Kaoru KurisuDirectorRetail Team LKumiko NinomiyaAnalystRetail TCBRE Japan ResearchRichard BarkhamPh.D.Global Chief Economist&Global Head of R Global and Regional ResearchHenry Chin,Ph.D.Global Head of Investor Thought LeadershipHead of Research,Asia Pacific R.hk