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[PR] GUIDE FOR PURCHASING JAPAN PROPERTY[PR] GUIDE FOR PURCHASING JAPAN PROPERTY

2017-11-09

Types of Tokyo Real Estate Investments

  • Advice


According to the experienced Real Estate Investors, not all investments in Real Estate return back equal. Therefore, Tokyo Real Estate Experts divided it into different types, and it is vital to understand what each type of property investment is and what payback and risks are involved. Real Estate Investor in Tokyo categorizes among many types of real estate based on the capital returns generate. It all depends on the real estate investor to choose what types that best match with his/her criteria, whether you want to sell/rent to real estate in Tokyo. Let’s examine in detail of Tokyo Real Estate Investment. Tokyo Real Estate Investment will rise in the coming future because of the following reasons:

  • Tokyo Olympics 2020 Games gives new birth to Tokyo because of the various infrastructure developments

  • Tokyo population is expected to increase in the long run 

Currently, the real estate price in Tokyo is less expensive than that in other major cities such as London, New York, Hong Kong, Singapore, and Beijing. The Tokyo Real Estate divided into the Following types:

  1. Residential Property 

  2. Office Real Estate  

  3. Retail property 

  4. Industrial property

  5. Hotel Property 

  6. Land Property 

Tokyo Residential Property Investments:

The residential Real Estate prices have measured the supply and demand in the market. Residential real estate categories further into different types of single family unit, multi-family, apartment, townhouses, and luxury apartments. According to the Nomura Research Institute, Japan’s population is decreasing in the coming future due to low birth rate. As a result, the number of the single family-owned real estate will also be decreasing. On the contrary, one person household/Single family home in Tokyo is expected to increase in recent future. Single Family unit means that the building structure is maintained and used as a single dwelling unit. Mostly Japanese people preferred single independent units for a living than multi-family property. The multi-family real estate is not very common overall Japan and particularly in the Tokyo. For the real estate investor single family unit is grabbing more attention from the buyer’s point of view based on the following reasons:

  • To sell real estate any time whenever you want 

  • Easy to rent and manage single tenants 


Tokyo Office Real Estate Investment: 

According to the real estate investor, office real estate investment is the famous type investment in the Tokyo real estate. According to David Green-Morgan, global capital markets research director at Jones Lang LaSalle real, investors has positive feeling overall about Japanese economy around the world. Consequently, there are very bright chances to increase the rents of the office real estate in future. Returns from the commercial real estate investment are all dependent on the economic activity in the country. In the coming future, there are ample chances to raise the Tokyo office real estate prices in times of prosperity; offices tend to perform extremely well. Tokyo’s Central Business District (CBD) is 70% concentrated in the five wards like Shinjuku, Chou, Chiyoda, Minato, and Shibuya. In Japan mostly individual overseas customers are interested in investing in the residential real estate than commercial. On the other side, a group of companies is interested in investing in the commercial properties like Japan Real Estate Investment Corporation. 




Retail Real Estate Investment:

It refers the broad category of retail estate investment varies from the shopping malls, small retail store, and single tenant building in downtown area. Tokyo downtown area rent is highest all the time compared to the other areas. The demand for retail real estate prices depends on the number of factors like location, subway station, number of visitors in a day, and income level of the shoppers. 

Industrial Real Estate: 

The industrial real estate includes all land, buildings, and related offices utilized to perform the industrial activities (i.e., Production, Manufacturing, Assembly, Warehousing, Research, Light Storage, and Distribution). Industrial real estate investors categorize into three parts: small, medium, and large. The investors in only interested in the industrial real estate due to high rental income and less maintenance cost. The real charm for Industrial real estate investor is that tenants are willing to contract for a long-term lease with a huge amount of security than the personal residential real estate. 

Tokyo Hotel Property:

TOKYO --- Japan Olympics announcement has opened the new era of investment in Tokyo. Japan government tourist department and the local hotel industry bodies will expect a huge influx of foreign tourist and headed for an increase of over 60,000 hotels luxury rooms by the start of the Olympics. Contrary, in the last decade, due to the lack of interest inbound tourist in the hotel sector was declined and the maximum hotel is doing business in Osaka and Tokyo and even converted office blocks to hotels. The Japanese Prime Minister Abenomics approach to increase the outbound tourist to 40 million by 2020 and 60 million by 2030. This abrupt increase of the foreign tourist contributed the most to the weakening yen because accepting outbound tourist generate a big economic activity and provide an opportunity for international exchange, shown in the graph. 

A huge lift to occupancies and Revenue per available room (RevPAR) growth is expected from increased demand during the Tokyo Olympic period. It’s captured the local and foreign real estate investor attention like Fortress Investment Group (Japan) GK, told Reuters the firm expects hotels business is generating the highest returns than other businesses of the group because far more tourists are expected to visit Japan. According to the Jones Lang LaSalle’s Hotels & Hospitality Group (H&H), Tokyo Hotel industry is one of the major beneficiaries of the Olympics 2020. Therefore, Tokyo hotel industry investment is considered secure for the real estate investor. 






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