Business · Companies · 1 hr ago
Office rental growth keeps US investors in Japan despite rate rises
US investors are continuing to invest in Japan’s real estate market despite rising interest rates.
Strong rents for offices in prime locations are helping keep that money flowing.
The Bank of Japan raised its benchmark rate by 0.25 percentage points in June and again in September, to 1.25 per cent.
That is the highest level since 1995, according to Japanese media.
With underlying inflation at the bank’s 2 per cent target, analysts expected another increase to 1.5 per cent by December or January.
Investors have become more selective about where they put their money as rates rise.
US capital continues to flow into Japan’s real estate market despite expectations of further interest rate increases.
Healthy office rental growth in prime locations is helping sustain investor interest.
Analysts say investors have become more selective within the market.
The Bank of Japan raised its benchmark policy rate twice, to 1.25 per cent.
Analysts expected another increase to 1.5 per cent by December or January.
- Who
- US investors and the Bank of Japan.
- What
- US capital continues to enter Japan’s real estate market despite rate increases, supported by office rental growth.
- When
- The Bank of Japan raised rates in June and September; another increase was expected by December or January.
- Where
- Japan, including prime office locations.
- Why
- Healthy rental growth in prime offices has supported investor interest, while investors have become more selective.
This story does not have two clearly opposing sides.
The Bank of Japan implemented a 25-basis-point rate increase.
The Bank of Japan implemented another 25-basis-point increase, bringing its benchmark policy rate to 1.25 per cent.
Analysts anticipated another 25-basis-point increase, which would bring the policy rate to 1.5 per cent.
- Bank of Japan policy rate
- 1.25 per cent after two increases
- Rate increases
- 25 basis points each, in June and September
- Expected next policy rate
- 1.5 per cent by December or January
- Inflation target
- 2 per cent