ANREV conference: Japan is set for an economic renaissance, which will boost real estate investment opportunities

In a survey conducted at the ANREV Annual Conference, delegates said they prefer the logistics real estate sector, cited by 29 percent as their first preference, while 25.5 percent favor residential real estate and 16.6 percent like Japan’s office sector. They also predict solid performance for Tokyo real estate; office yields are expected to stay at current levels or fall further, indicating a rise in prices.

The conference was held in Tokyo on Oct. 25 with a record attendance of more than 400 property investors, asset managers and advisers.

Investors and investment managers speaking at the event said Japan, the largest developed real estate market in Asia Pacific, was an essential part of their regional portfolio. Meanwhile, it was clear that Japanese investors are set to become major investors in global real estate. Close to a quarter of attendees were institutional investors and 91 percent said they were already investing in overseas real estate.

Fears that Japanese investors might make the mistakes of the 1980s, when many lost money investing in overseas property, were overblown, the audience heard. Japanese institutions are planning cautious and systemic investment overseas.

The conference opened with a look at China and the United States’ tussle for global primacy and keynote speaker Professor Kishore Mahbubani, dean and professor in the Practice of Public Policy at the Lee Kuan Yew School of Public Policy, National University of Singapore, said short-term tensions would not stop the inexorable rise of China. The audience agreed, with 69 percent saying they believe the trade war could lead to opportunities for property investors.

Looking ahead to the next decade, the audience believes the risk of a downturn or policy misstep is likely in the short term, but in the longer term, 93.5 percent expect more capital to be invested in Asia Pacific real estate. Nearly half the audience (46 percent) expect Asia Pacific real estate to offer higher returns than the asset class in the United States or Europe.

The conference attendees also heard about new niche sectors in real estate, including Japanese multifamily housing, student hotels and senior care. More than 90 percent of the audience expect more investment in alternative real estate sectors in the future.