Tokyo Leads Global Real Estate Investment as Japan Posts Record-High Q1 Inflows
Japan’s real estate market achieved a historic milestone in the first quarter of 2025. According to Jones Lang LaSalle (JLL), total real estate investment in Japan exceeded JPY 2 trillion for the first time ever in a single quarter, reaching JPY 2.095 trillion (USD 13.7 billion). This surge was largely driven by robust foreign capital inflows and a series of large-scale deals, with Tokyo ranking as the world’s most invested city, ahead of New York and Dallas–Fort Worth.
Global real estate investment rose by 34% year-on-year to USD 185 billion in Q1 2025. All major regions saw growth, fueled by declining borrowing costs and renewed institutional activity:
- Americas: +37%
- EMEA: +41%
- Asia Pacific: +20%
Within Asia Pacific, Japan led the momentum, followed by South Korea, Australia, and Singapore. In contrast, China experienced a 33% drop in activity due to deepening property market concerns.
Tokyo recorded USD 11 billion in investment in Q1, maintaining its No.1 global position for the second straight quarter. New York followed with USD 7.3 billion, and Dallas–Fort Worth with USD 6.3 billion. Osaka dropped to 39th, signaling
the concentration of capital in Tokyo’s core wards.
Foreign investment into Japanese real estate surged to JPY 633.1 billion — a 3.7-fold increase from a year earlier — accounting for 32% of total market volume, the highest Q1 share since 2020.
Key deals included:
- Blackstone’s acquisition of Tokyo Garden Terrace Kioicho (approx. JPY 400 billion)
- Gaw Capital Partners’ purchase of Tokyu Plaza Ginza
These highlight the strong interest of global institutional funds and Asia-based family offices in Japan’s stable and strategically located assets.
Sector-wise, offices dominated, capturing 58% of Q1 investment (JPY 1.21 trillion), the highest share since 2015. Retail followed with 16% (JPY 300 billion), supported by recovering tourism and tight supply in prime locations. Logistics and hotel sectors both declined, at 6% and 11% respectively, while rental residential remained steady at 9%.
Geographically, 61% of all investment was concentrated in Tokyo’s five central wards — Chiyoda, Chuo, Minato, Shinjuku, and Shibuya — the highest since Q1 2018. This reflects a consistent preference for high-quality, income-generating assets in Japan’s most established submarkets.
Looking ahead, JLL projects Japan’s annual investment volume could reach JPY 6 trillion by the end of 2025, up from JPY 5 trillion in 2024. With anticipated interest rate hikes, more domestic corporations may divest assets, unlocking new acquisition opportunities.
Japan continuesto stand out as a top destination for global capital in 2025 — combining stability, yield, and accessibility.
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Source: Nikkei
Toshihiko Yamamoto is the founder and principal broker of Yamamoto Property Advisory, a distinguished real estate brokerage in Tokyo that specializes in luxury residential and investment properties for an international clientele. His firm caters to discerning investors seeking premier properties for personal use and income-generating whole buildings for investment purposes.A licensed realestate broker in Japan, Mr. Yamamotoholds an MBA from Bond University in Australiaand a Certified Commercial Investment Member (CCIM) designation from the CCIM Institute in the United States. His extensive international experience, having lived abroad in Australia and the United Kingdom, equips him with a nuanced understanding of global real estate trends and the unique needs of foreign investors.With over two decades of experience in international business, Mr. Yamamoto has successfully conducted business with clients from more than 20 countries. As a seasoned property investor himself, he provides informed guidance to his clients as they navigate the intricacies of the Japanese real estate market to secure optimal investments.Discover more in his book, “The Savvy Foreign Investor’s Guide to Japanese Properties: How to Expertly Buy, Manage, and Sell Real Estate in Japan,” available on Amazon, iBooks, and Google Play.Connect with us through social media on Instagram, WhatsApp, and LINE for further information and expert assistance.
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