APAC definitely stands out from a near-term growth potential perspective vs North America and Europe, and within APAC, Japan stands out given it’s the only deep institutional market in the region where investors can still efficiently invest across all the major cities and asset classes, and across the risk curve, despite the current headwinds. In a recent survey conducted by JLL, 56% of fund managers responded that they were looking to increase their real estate exposure to Japan. This was higher than the rates for all the other major markets in APAC.
Below is the latest report by well-known hotel consultant, Bill Barnett, and his team at C9 Hotelworks. Niseko has been the hottest real estate market in Japan for the past decade, and probably the hottest new resort destination in APAC over the same period. The market is in the process of moving to a new level on the back of the opening of the Park Hyatt Hotel and Residences in Hanazono earlier this year, and with upcoming projects like the Ritz Carlton Reserve in Niseko Village and the Aman in Moiwa. Summer traffic has also picked up substantially in recent years as the area slowly becomes a year-round destination for holidaymakers.
Some interesting predictions in the article below by the CEO of one of Japan's largest banks, Mizuho. Let's hope he is right and Covid is an accelerant for change at Japan Inc on the digitization, succession and M&A front. That would be a positive for many people, especially those in private equity looking at opportunities there.
The debate regarding the role of the office for larger companies and flexible working arrangements for their employees, and how it is likely to impact their corporate footprint and in turn the real estate industry, will certainly continue for some time. It will be interesting to see how it plays out over the years to come and impacts the real estate markets in the major gateway cities globally. The article below is worth a read for those interested in the topic.
Large Japanese corporates may have been a little late to adopt flexible working arrangements, however, they are now well and truly on the bandwagon going by recent announcements. NTT has just announced they will let 70% of staff work from home, up from a recently set target of 50%. This news is on the back of similar announcements by other large corporates including KDDI, Hitachi and Fujitsu, some of Japan’s largest employers. Covid is certainly shaking things up on the occupier front, which will have an impact on investment in the office sector in Japan going forward.