the japanese real estate investment market 2015 -...

The Japanese Real Estate Investment Market 2015

June 2015

Nomura Research Institute

Marunouchi Kitaguchi Bldg. 1-6-5 Marunouchi, Chiyoda-ku,

Tokyo 100-0005, Japan

Copyright（C） Nomura Research Institute, Ltd. All rights reserved. 1

This report has been produced by Nomura Research Institute solely for information purposes. It is not intended to be a

complete description of the markets or developments to which it refers. No warranty for representation, express or implied is

made as to the accuracy or completeness of any of the information herein and Nomura Research Institute shall not be liable

to any reader of this report or any third party in any way whatsoever.

To create a transparent real estate investment market in Japan


Research Framework and Perspectives

for this Report

Times New Roman, size 8, color: Dark Gray

Ex) Source: NRI based on IMF

Rental Market

Supply

Rent and NOI

How much floor space

is newly developed ?

How much floor space

is demolished?

…

Demand

What are the key drivers of demand?

Which industries require more space?

Which districts are in demand?

…

Increase or decrease?

Vacancies

Increase or decrease?

Trading Market

Lenders Sellers

Buyers

What properties

interest buyers?

How strong is their

buying appetite?

Cap Rate

What cap rate level leads to successful transactions?

Liquidity

What kinds of properties are transacted successfully and what are not?

What properties

are lenders willing

to finance?

What are the lending

conditions?

Who are the

potential sellers?

What assets are

likely to be sold?

Asset Price Estimation

Will asset value rise or fall?

Macrofundamentals

GDP growth, corporate performance, demographic movements…

Financial and Capital Markets

Interest rates, financial and other regulations, political trends…


Population Movements in Japan

Macro Fundamentals of Japan

Overview of Real Estate Investment Market in Japan

Office Market

Residential Market

Retail Property Market

Logistics Property Market

Table of contents

Real Estate Investment Products





Office Market

Residential Market



Table of contents




Total population peaked out in 2005. The number of households is increasing for now, but it is projected to decrease after 2019.

The population of 65 years or older is expected to level off in 2025 and head downwards in 2040.

Japan’s population is aging and shrinking due to a low birth rate.

The number of households will also be decreasing soon.

Population and Households in Japan

Source: NRI based on National Institution of Population and Social Security Research

Note: Medium-fertility (medium-mortality) projection

Forecast → ←Actual

0

10,000

20,000

30,000

40,000

50,000

60,000

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

19

70

19

75

19

80

19

85

19

90

19

95

20

00

20

05

20

10

20

15

20

20

20

25

20

30

20

35

20

40

20

45

20

50

20

55

20

60

Households

(thousand)Population(thousand)

0-14

15-64

65+

Household


-150

-100

-50

0

50

100

150

200

250

1980 1985 1990 1995 2000 2005 2010

Population(thousand)

Kanagawa

Chiba

Saitama

Tokyo

Population Movements in Tokyo

Population inflow into Tokyo is expected to continue.

Population continues to increase in Greater Tokyo.

Net Population Inflow into Greater Tokyo

Source: NRI based on Basic Resident Register Population Migration Report

Inflow

Outflow


0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

Households(thousand)

Chiba

Saitama

Kanagawa

Tokyo


In the Tokyo metropolitan area, total population and number of households are projected to peak out in 2015 and 2025, respectively.

Population and households are projected to decrease in Tokyo in 5 to 10 years time.

Population in Greater Tokyo Households in Greater Tokyo

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

19

70

19

75

19

80

19

85

19

90

19

95

20

00

20

05

20

10

20

15

20

20

20

25

20

30

20

35

20

40

Population(thousand)

Chiba

Saitama

Kanagawa

Tokyo



Forecast → ←Actual Forecast → ←Actual



The number of single-person households is expected to peak out in 2030.

Households in Tokyo are expected to increase over the medium term owing to the strength

of one-person households.

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

1995 2000 2005 2010 2015 2020 2025 2030 2035

Households(thousand)

One-person

Couple-only

Couple-and-child(ren)

One-parent-and-child(ren)

Other




Number of Households by Family Composition



Population is expected to increase in the Chuo, Koto and Minato wards.

In seven wards, the population is projected to decrease by over 10% between 2010 and 2040.

Population in Tokyo is predicted to increase over the long term only in the three wards along

Tokyo Bay.

Ward 2010 2015 2020 2025 2030 2035 2040 Chuo 100.0 112.9 115.3 116.6 116.8 116.1 114.4 Koto 100.0 102.7 104.4 106.8 108.2 108.8 108.5 Minato 100.0 105.0 107.0 107.9 107.8 107.0 105.2 Shinjuku 100.0 103.3 104.4 104.8 104.4 103.4 101.6 Nerima 100.0 103.8 105.1 105.3 104.5 102.9 100.6 Sumida 100.0 100.8 101.7 102.6 102.7 102.0 100.6 Arakawa 100.0 102.4 103.0 102.8 102.2 101.2 99.7 Chiyoda 100.0 106.9 106.9 106.1 104.6 102.2 99.3 Setagaya 100.0 102.1 102.7 102.4 101.5 100.0 97.9 Shinagawa 100.0 102.4 102.9 102.7 101.7 100.0 97.8 Edogawa 100.0 101.5 101.7 101.1 99.8 98.2 96.2 Bunkyo 100.0 101.8 101.9 101.3 100.1 98.2 95.7 Toshima 100.0 107.3 106.1 104.5 102.2 99.2 95.3 Ota 100.0 101.6 101.6 100.8 99.4 97.5 95.1 Itabashi 100.0 100.9 100.5 99.1 97.2 94.7 91.8 Meguro 100.0 100.8 100.2 98.8 96.8 94.1 91.1 Taito 100.0 100.6 99.5 97.7 95.4 92.6 89.4 Shibuya 100.0 100.3 98.8 96.6 93.9 90.9 87.4 Nakano 100.0 99.4 97.7 95.5 92.9 89.8 86.2 Kita 100.0 99.4 97.6 95.1 92.2 89.0 85.5 Suginami 100.0 99.4 97.6 95.1 92.0 88.5 84.5 Katsushika 100.0 98.2 95.7 92.4 88.7 84.8 80.8 Adachi 100.0 98.0 95.2 91.6 87.5 83.1 78.7



Population Trends in Tokyo (2010=100)





Office Market

Residential Market



Table of contents




Japan’s economic growth is the lowest compared to other major economies with low

forecasts for future growth.

IMF forecasts estimate Japan’s GDP growth rate at 1% for the next 5 years.

Estimate → ←Actual

Source: NRI based on IMF data (2014 Oct. and 2015 Update)

ChinaIndia

Japan

Korea

UKUS

-10.0

-5.0

0.0

5.0

10.0

15.0

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

（％）←Actual Estimate→

Real GDP growth rate of major economies


0

5,000

10,000

15,000

20,000

25,000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

(Billion USD)

US

China

Japan


Despite the weak growth, Japan remains one of the largest economies in the world.

Although Japan was overtaken by China and fell to the third place in world nominal GDP, India, Brazil and Russia will still remain behind

Japan by 2020, assuming current growth rates continue.

Source: NRI based on IMF (2014 Oct.)

Note: Figures up to 2019 are IMF forecasts and those up to 2020 are calculated with the assumption that the CAGR from 2014 to 2018 will be maintained.


Nominal GDP of Major Countries


-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0 （％）


Consumer price index became less active, despite the rise in price due to the consumption

tax increase.

With consumer sentiment depressed due to the consumption tax increase, the growth of consumer price index began to slow down.

Source: NRI based on Japan Ministry of Internal Affairs data

Inflation target

set by BOJ

Year-on-Year Change in Japan’s Consumer Price Index (excluding fresh foods)


70

80

90

100

110

120

130


Yen still continues to decline.

Large-scale monetary easing, the “first arrow” of Abenomics, has rapidly lowered the yen from the end of 2012.

Source: NRI based on Bloomberg data

(USDJPY=X)

USD-JPY exchange rate



Trade deficit is expanding, while the current account surplus is shrinking.

Japan’s trade balance recorded deficit for four consecutive years from 2011, while the current account surplus fell to a record low in

2014.

Source: NRI based on Japan Ministry of Finance data

Japan’s Current Account

-15

-10

-5

0

5

10

15

20

25

30

35

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

(兆円)

(年)

貿易収支サービス収支第一次所得収支第二次所得収支経常収支

(Trillion yen)

-15

-10

-5

0

5

10

15

20

25

30

35

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

(Trillion yen)

(CY)

Trade Balance Service Balance Primary income balance Second income balance Current Account



The principle factor behind the rise of trade deficit was imports unit value.

In 2014,Increase in export volumes has not been yet reflected to trade balance.

Source: NRI based on Japan Ministry of Finance data

(Trillion yen)

Japan’s Trade Balance (YoY Change)

-30

-20

-10

0

10

20

30

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

輸出数量要因

輸出価格要因

輸入数量要因

輸入価格要因

近似誤差

貿易収支の変化額（前年差）

Exports quantum factor

Exports unit value factor

Imports quantum factor

Imports unit value factor

Approximation error

Changes in trade balance (YoY)



Export volumes have been increasing, because of yen’s depreciation.

Export volume has expanded due to yen’s depreciation and lower oil price, especially in industries such as automobile. However,

Japanese companies are experiencing stagnant growth in exports as a result of growing offshore transfers of production as well as of

severe competition with cheap foreign products.

Source: NRI based on MOF and BOJ data

Japan’s Export Indexes

60

70

80

90

100

110

120

130

2009 2010 2011 2012 2013 2014 2015

2010＝100

Exports Quantum Index

（seasonally-adjusted）

Exports unitvalue index

（contract currency basis）



Government debt has mounted, raising concerns about a potential financial collapse.

The IMF forecasts that Japan’s ratio of government debt to GDP will peak out but still remain high.

A surplus in the primary balance, which is one of the conditions for preventing financial collapse, is expected to be difficult to achieve at

least for the next several years.

Source: NRI based on IMF data (2014 Oct.) Source: NRI based on IMF data (2014 Oct.)

Forecast → ←Actual Forecast → ←Actual

Ratio of Government Debt to GDP Ratio of Government Primary Net Lending/Borrowing to GDP

-12

-10

-8

-6

-4

-2

0

2

4

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

（％）

Japan

US

UK

Germany

0

50

100

150

200

250

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

（％）

Japan

US

UK

Germany



A financial collapse is unlikely as long as domestic capital remains in Japan and continues

to circulate.

The possibility of Japanese government bonds collapsing is seen to be small since more than 90% of the bonds are held by domestic

investors.

Household financial assets, which are a resource for government bond purchases, have increased due to rising stock prices in recent

years.

Source: NRI based on Bank of Japan data

(年) 0

200

400

600

800

1000

1200

1400

1600

1800

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

(Trillion yen)

Note: Figures for Japan and US are from Dec 2014; for UK and Germany, from 2014 Q3.

Source: BoJ, FRB, ONS, Bundesbank

0%

20%

40%

60%

80%

100%

Japan US UK Germany

Domestic investors Foreign investors

Government Bond Investors Household’s Financial Assets in Japan



Long-term interest rates remain stable at a low level.

0.0

1.0

2.0

3.0

4.0

5.0

6.0

Long-term Interest Rates (Monthly) and Sovereign Ratings

Japan

AA-/Negative/A-1+

Germany

AAA/Stable/A-1+

UK

AAA/Stable/A-1+

US

AA+/Stable/A-1+

Note: Classifications are as of Feb. 2014 (Long-term/expected/short-term, in local currency)

Source: NRI based on Ministry of Finance Japan, FRB, ECB, Bank of England, and S&P

Currently Japan’s interest rates remain at a lower level than that of UK and US. If the irrational gap between the interest rate level and

sovereign ratings is closed, Japan’s interest rates may rise.



Tokyo continues to be the world’s largest city in terms of population and GDP.

Tokyo

Delhi

Shanghai

BeijingMumbai

Dhaka

Mexico City

Sao PauloCairo

New York

Buenos Aires

Los AngelesParis

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

0 500 1000 1500 2000 2500

GDP/population estimation in 2025 (Top 30 cities of population)

2025 population

by city

( in 1000’s)

2025 GDP scale

by city

（in billion USD at

2008 PPPs ）

Source: NRI based on PricewaterhouseCoopers and UN data


Tokyo has the second largest concentration of world-class enterprises.

Rank Company Revenue(Mil$)

23 Japan Post Holdings 152,125

45 Honda Motor 118,210

51 JX Holdings 111,014

53 Nippon Telegraph & Telephone 109,054

61 Nissan Motor 104,635

78 Hitachi 95,988

105 Sony 77,532

108 Mitsubishi 75,755

124 Marubeni 70,429

135 Softbank 66,546

139 Tokyo Electric Power 66,194

145 Toshiba 64,907

148 AEON 64,240

164 Dai-ichi Life Insurance 60,340

173 Mitsui 57,302

176 Seven & I Holdings 56,572

184 Nippon Steel & Sumitomo Metal 55,062

199 Mitsubishi UFJ Financial Group 51,667

Beijing, 52

Tokyo, 41

London, 18

Paris, 18

New York, 17

Seoul, 14

Osaka, 8

Shanghai, 8

Houston, 7

Moscow, 7

Others, 310

Number of Fortune Global 500 companies by city (2014) Fortune Global 500 companies in Greater Tokyo (within top 200)

Source: NRI based on Fortune Global 500 (2014) data






Office Market

Residential Market



Table of contents



Investors’ activities has been recovering to the 2005-2006 level.

In 2013, J-REIT, the most powerful real estate buyer in Japan, acquired assets of more than 20 billion USD. In 2014, however, J-REIT

lost its dominance to other investors such as private-REITs, high-net-worth individuals and corporations with more aggressive attitude

towards acquiring assets. Other professional investors are also being ousted from the Tokyo market.


Source: NRI based on MLIT

611 305 676 8951,772 2,031 1,679

628 439 604 7921,555

2,237

2,1232,236

3,307

4,439

5,159

6,242 7,205

2,210

1,359539

1,549

1,791

2,156

0

2,000

4,000

6,000

8,000

10,000

FY2001 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013

Others J-REIT

billion yen

Acquisitions of Securitized Real Estate


1,611

710

1,516 1,7282,194 2,124

2,503

891556 768 512

1,0921,501

267

552

686808

1,293 1,5891,321

348

235441

406

550

603161

270

404

835

790

1,107 981

479

289

252309

452

788615

746

0

2,000

4,000

6,000

8,000

FY2001 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013

Office Residential Retail Logistics Hotel Others

Hotel deals has been increasing amongst other key segments, i.e. office, residential, retail

and logistics properties.

Factors such as the 2020 Olympic game in Tokyo, weak JPY currency, and strong macro economy in Japan have helped to push the

demand in hotels, attracting more investors to hotel investment.


Note: Because the utility of securitizations that require actual TMK is unclear, they have not been included after 2001. Because of this, the yearly totals and amounts will not match up with the documents

cited for this entry.

Source: NRI based on Ministry of Land, Infrastructure, Transport and Tourism’s “Survey of the Current State of Real Estate Securitization”

billion yen

Office, 33.8%

Residential, 17.1%Retail, 16.0%

Logistics, 13.8%

Hotel, 3.3%

Others, 16.0%

Acquisitions of Securitized Real Estate by Asset Class Allocation of Securitized Real Estate by Asset Class

in 5 years (2009-2013)


Note: not including securitization of real estate of SPC

Lack of assets in Tokyo is likely to cause investment money to head to other regions.

For last few years, it has been extremely difficult for investors to find investment opportunities in Tokyo. In 2014 and 2015, transactions

in the ex-Tokyo area are expected to increase significantly in a trend similar to the one seen in pre-global financial crisis era.


Source: NRI based on MLIT

41.9%

51.9%

53.0%

66.0%

58.8%

47.9%

51.9%

12.1%

12.7%

10.5%

11.8%

12.0%

15.3%

13.3%

10.5%

8.8%

8.4%

6.9%

8.0%

9.5%

10.0%

6.4%

5.5%

6.9%

4.0%

5.1%

3.7%

23.1%

17.4%

17.2%

12.0%

14.9%

19.9%

17.8%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

FY2007

FY2008

FY2009

FY2010

FY2011

FY2012

FY2013

Tokyo Greater Tokyo Osaka Nagoya Fukuoka Others

Number of Properties Securitized by Region


3.7

7.3

13.8

-7.2

0.3

7.4

5.0

-11.7

2.3

-15.0

-10.0

-5.0

0.0

5.0

10.0

15.0

20.0

Mar

Jun

Sep

De

cM

arJu

nSe

pD

ec

Mar

Jun

Sep

De

cM

arJu

nSe

pD

ec

Mar

Jun

Sep

De

cM

arJu

nSe

pD

ec

Mar

Jun

Sep

De

cM

arJu

nSe

pD

ec

Mar

Jun

Sep

De

cM

ar

Jun

Sep

De

cM

ar

Jun

Sep

De

cM

ar

Jun

Sep

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Total return recovered to 7%, the 2005 Q1 level.

Prior to the global financial crisis, the total return reached to 7% in 2005 Q1, and hiked till 2006 Q2.

Total return maintained the rate over 10% until 2007 Q1.


Source: MSCI Real Estate IPD

Total Return

Capital Return

Income Return

Performance Trend in Japan

(%)


3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

Oct

-03

Ma

r-0

4

Au

g-0

4

Jan

-05

Jun

-05

Nov

-05

Apr

-06

Sep-

06

Feb-

07

Jul-

07

De

c-0

7

Ma

y-08

Oct

-08

Ma

r-0

9

Au

g-0

9

Jan

-10

Jun-

10

Nov

-10

Apr

-11

Sep

-11

Feb-

12

Jul-

12

Dec

-12

May

-13

Oct

-13

Ma

r-1

4

Au

g-1

4

Office Tokyo CBD Office Osaka CBD Retail Tokyo Residential Tokyo Logistics Tokyo Multi

Office Tokyo CBD

Office Osaka CBD

Retail Tokyo

Residential Tokyo

Logistics Tokyo Multi

Cap rates fell sharply and by 2014 most likely reached the 2007 level.

In the Tokyo market, an increasing number of real estate deals have cap rates of 3-4%. Some investors believe that arguing cap rates

is futile as one can expect higher rents. Such market players consider timing and level of rent increase more important rather than cap

rate compression.


Source: NRI based on Japan Real Estate Institute

Cap Rate Trend in Japan


Mega deals of over one billion USD have increased.

Transaction

Month/Year Dec, 2013 Mar, 2014 Aug, 2014 Oct, 2014 Nov, 2014

Asset Land next to the

Hamamatsucho Station Otemachi Tower (Ratio of Acquisition: 17% )

Meguro Gajoen Pacific Century Place

Tokyo （Office floors） GE’s Residence Portfolio

（200 properties）

Property Type Land Office Office・Hotel Office Residence

Area Minato, Hamamatsucho Chiyoda, Otemachi Meguro, Meguro Chiyoda, Marunouchi All parts of the country

Seller Kokusai Kogyo Tokyo Tatemono’s SPC Lone Star Secured Capital Japan

（PAG） GE Real Estate Japan

Buyer Nippon Life Insurance

Obayashi Mizuho Bank Mori Trust GIC Blackstone

Transaction

Amount 800 million USD 1,782 million USD 1,300 million USD 1,700 million USD 2,000 million USD

Gross Floor

Area 7,205㎡

34,200㎡

(Floor Area of Acquisition) 155,820㎡

38,840㎡

(Floor Area of Acquisition) NA


Source: NRI based on Nikkei Real Estate Market Report and others


Money from investors with different perspectives have caused real estate prices to rise and

capital to diversify in various market segments.

Properties that domestic investors do not favor due to risk concerns have been purchased by foreign and non-professional (e.g. high-

net-worth) investors with different goals, causing real estate prices to rise in the ex-Tokyo area. The trend is undoubtedly due primarily

to the fact that such investors cannot find any good investment opportunities in Tokyo.


Transaction

Month/Year Jun, 2014 Sep, 2014 Oct, 2014 Nov, 2014 Nov, 2014

Asset Shinbashi Park Place Nihonbashi Tomihisa

Daini Building Parel Royale Shoto Ginza Granvia Bldg 2 Seiko BldgH

Property Type Office Office Residence Retail Office・Retail

Area Minato, Shinbashi Chuo, Nihonbashi-

Honcho Shibuya, Shoto Chuo, Ginza Osaka, Kita Shinchi

Seller NA Ascott NA Hulic NA

Buyer high-net-worth high-net-worth

(Taiwanese) high-net-worth high-net-worth high-net-worth

Transaction

Amount NA NA NA NA NA

Gross Floor

Area 2,646㎡ 1,310㎡ 2,873㎡ 1,340㎡ 3,342㎡



Because of the lack of investment opportunities at Tokyo metropolitan area,

equity heads to the Tokyo neighboring part and ex-Tokyo area.

Many investors are seeking investment opportunities in Osaka, Nagoya and other regions other than Tokyo, repeating a similar trend

seen between 2004 and 2007. How to build good relations with regional banks is one of the key issues for real estate investors at

present.


Transaction

Month/Year Jul, 2014 Oct, 2014 Oct, 2014 Oct, 2014 Jan, 2015

Asset Renaissance Resort

Okinawa

Shinagawa Seaside

(3 properties)

Sumitomo Life Sendai

Bldg Beppu Kamenoi Hotel

Maebashi Daiichi Life

Bldg

Oyama Daiichi Life Bldg

Property Type Resort Hotel Office Office Hotel Office

Area Okinawa Shinagawa Miyagi, Sendai Oita Mebashi, Oyama

Seller Ishin Hotel Group Japan Tabacco Sumitomo Life AZ Hotel Chain Daiichi life

Buyer Green Oak Real Estate

Idera Capital

Management

Lone Star

Elliott Management

Goldman Sachs Fortress Investment

Group KAISER ASSET

Transaction

Amount 130 million USD

600 million USD

(for 3 properties) NA 40 million USD 8.5 million USD

Gross Floor

Area 40,195㎡ 140,000㎡ 20,411㎡ 19,422㎡ 12,000㎡



Fierce competition among commercial banks help boost prices.

Banks’ lending attitude toward the real estate industry is nearly the most lenient since 2000 and almost as lenient as in 2006. Many

people in Japan believe that there are too many banks, and competition among lenders is quite fierce. Along with major banks, regional

mid-size banks are trying to reduce spreads and loosen covenants. One big difference from the last peak we saw in 2006, however, is

the non-participation of foreign lenders. One reason why foreign lenders are staying away from the Japanese debt market is the fact

that the CMBS market has been frozen since 2009.


Loose

Tight

Source: NRI based on BOJ

-35

-30

-25

-20

-15

-10

-5

0

5

10

15

Mar

-00

Sep-

00

Mar

-01

Sep-

01

Mar

-02

Se

p-0

2

Mar

-03

Se

p-0

3

Mar

-04

Sep-

04

Mar

-05

Sep-

05

Mar

-06

Se

p-0

6

Mar

-07

Sep-

07

Mar

-08

Sep-

08

Mar

-09

Se

p-0

9

Mar

-10

Sep-

10

Mar

-11

Sep-

11

Mar

-12

Se

p-1

2

Mar

-13

Sep-

13

Mar

-14

Sep-

14

Financial Institutions’ Lending Attitude DI toward Real Estate Industry





Office Market

Residential Market



Table of contents



Office Market

Tokyo Area holds 60% of Japan’s office rental market.

Japan has a stock of around 106 million ㎡ of available office rental space. The Tokyo area holds an overwhelming share of the market

at 64 million ㎡, comprising 60% of the total.

Source: NRI based on JREI As of Jan.2014

The investigation focus on central area of each city.

The investigation object which are smaller than 3,000 square meter are excluded

59.9%

4.7%1.0% 1.8%

14.9%

1.7% 1.0%5.5%

3.3%2.4%

2.1% 1.6%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Tokyo Yokohama Saitama Chiba Osaka Kobe Kyoto Nagoya Fukuoka Sapporo Sendai Hiroshima

(5.00million ㎡)

(63.94million ㎡)

(1.03million ㎡)(1.95million ㎡)

(15.91million ㎡)




(1.72million ㎡)

Tokyo Metropolitan Area

67.4％

12 major cities106.73million ㎡

Osaka Area

17.7％

Office Floor Space Shares by Major City


There are five sub sectors in Tokyo’s Central Business District.

Tokyo’s Central Business District(CBD) has an accumulation of office buildings and is concentrated in an area of 5km wide.

30 km

30 km

Tokyo 13.22 million people

Kanagawa 9.07 million people

Saitama 7.15 million people

Chiba 6.15 milion people

Setagaya Minato

Itabashi Kita

Adachi

Katsushika

Edogawa

Koto

Sumida Taito

Arakawa

Toshima

Bunkyo

Shibuya

Shinjuku Chiyoda

Chuo

Meguro

Shinagawa

Ohta

Nakano

Nerima

Suginami

Office Market


Source: NRI based on Miki Shoji Co., Ltd. data

Office Market

Vacancy rates in the Tokyo office market have been improving for two consecutive years.

Retrospectively, vacancy rates have been experiencing regular ups and downs.

Vacancy rate movement in Tokyo CBD

Monthly(Jan 2013 –Jan 2015) Yearly(1998 - 2014)

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

Shibuya

Shinjuku

MinatoChuo

Chiyoda

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

Jan

-13

Apr

-13

Jul-

13

Oct

-13

Jan

-14

Apr

-14

Jul-

14

Oct

-14

Jan

-15

Shibuya

Chiyoda

Chuo

Minato

Shinjuku


Yen/month, tsubo Yen/month, tsubo


Office Market

Although rent increase is slow, there has been a clear reversal in the rent trend.

Retrospectively, the high rent period have been short, making office owners’ negotiation power weaker than that of tenants.

Note: One tsubo is 3.3 square meters

Rent trends in Tokyo CBD (yen/tsubo per month)

Monthly(Jan. 2013 – Jan. 2015) Yearly(1999 - 2014)

10,000

12,000

14,000

16,000

18,000

20,000

22,000

24,000

26,000

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

ChiyodaShibuyaMinato

Chuo

Shinjuku

10,000

12,000

14,000

16,000

18,000

20,000

22,000

24,000

26,000

Jan

-13

Mar

-13

May

-13

Jul-

13

Sep

-13

No

v-13

Jan

-14

Mar

-14

May

-14

Jul-

14

Sep

-14

No

v-14

Jan

-15

ChiyodaShibuyaMinatoChuo

Shinjuku


3,818 3,8353,660

3,461

3,243

2,020 1,988

1,884

1,467 1,474 1,415

3,648 3,6433,565 3,498

2,083 2,078 2,035 1,998

1,5391,533 1,501 1,473

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

1990 1995 2000 2005 2010 2015 2020 2025

23区

5区

3区

（千人）

The number of Tokyo’s office workers is declining at a fast rate than the published forecast.

Trend and Forecast of Office workers in Tokyo

Office Market

Central 3 wards

(Chiyoda, Chuo, Minato)

Central 5 wards

(Chiyoda, Chuo, Minato, Shibuya, Shinjuku)

23 wards

Source: NRI based on Population Census of Japan, Tokyo Metropolitan Government

(1,000 people)


14.8%

15.8%16.4%

11.8% 11.8%

11.6%

13.5%

15.0%

15.6%

8.9% 8.7% 8.4%

6.2% 6.2% 6.1%

15.4%

15.3% 15.3%

11.5% 11.4% 11.3% 11.3%

15.2% 15.4%

15.5% 15.5%

8.6% 8.6% 8.6% 8.6%

6.3% 6.4% 6.4% 6.4%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

2000 2005 2010 2015 2020 2025

千代田区

港区

中央区

新宿区

渋谷区

Chiyoda and Minato has been increasing its share of office workers, whilst Shinjuku has

been losing its share midst fierce competitions among submarkets.

Trend of Office Worker Share （23 Ward ＝100%）

Office Market

Minato

Shibuya

Chuo

Chiyoda

Shinjuku

Source: NRI based on Population Census of Japan, Tokyo Metropolitan Government


56 55

83

100108104

114118

183

92

119

74

99

36

72

91

125

216

121

77

154

119

65

86 85

117

175

58

88

111110

124

96

0

10

20

30

40

50

60

70

0

50

100

150

200

250

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

# of buildingsSupplied f loor area

(1,000 ㎡)

Office supply areaNumber of building supplied

Source: NRI based from Mori Building Company’s “Mega Office Building Market Trends Survey (Preliminary figure)” dated October 22, 2014

Office Market

Despite the dwindle in the number of office workers, new office supply will continue to grow.

Office Space Supply in Tokyo’s 23 districts


Tokyo office market cap rate trend

Source: NRI based on Japan Real Estate Institute’s “Real Estate Investor’s Survey”

Office Market

Cap rate has been dropping for three consecutive years since 2012.

As of March 2015, office deals with cap rates of 3-4% are commonly carried out, resting on investors’ expectations for higher rent and

NOI, henceforth.

3.0%

3.5%

4.0%

4.5%

5.0%

5.5%

6.0%

6.5%

Oct

-03

Ap

r-0

4

Oct

-04

Ap

r-0

5

Oct

-05

Ap

r-0

6

Oct

-06

Ap

r-0

7

Oct

-07

Ap

r-0

8

Oct

-08

Ap

r-0

9

Oct

-09

Ap

r-1

0

Oct

-10

Ap

r-1

1

Oct

-11

Ap

r-1

2

Oct

-12

Ap

r-1

3

Oct

-13

Ap

r-1

4

Oct

-14

Chiyoda(Marunouchi) Chuo(Nihonbashi) Minato(Toranomon)

Shinagawa Shinjuku Shibuya

ShinjukShinagaShibuyaMinato(Toranomon)Chuo(Nihonbashi)Chiyoda(Marunouchi)

Shinjuku

Shinagawa


8,000

10,000

12,000

14,000

16,000

18,000

20,000

22,000

24,000

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

(yen/tsubo)

Tokyo

OsakaNagoyaYokohamaFukuokSendai

Sapporo


Office Market

The improvement of the vacancy rate is not leading to the recovery of rents in the ex-Tokyo

office market.

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

18.00%

20.00%

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Sendai

Fukuoka

NagoyaYokohama

SapporoOsaka

Tokyo

Office Vacancy Trend in ex-Tokyo Market Office Rent Trend in ex-Tokyo Market

Fukuoka


3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

Oct

-03

Apr

-04

Oct

-04

Apr

-05

Oct

-05

Apr

-06

Oct

-06

Apr

-07

Oct

-07

Apr

-08

Oct

-08

Apr

-09

Oct

-09

Apr

-10

Oct

-10

Apr

-11

Oct

-11

Apr

-12

Oct

-12

Apr

-13

Oct

-13

Apr

-14

Oct

-14

Sendai

Sapporo

FukuokaNagoyaYokohamaOsaka


Office Market

Liquidity is growing as real estate prices rise in ex-Tokyo office market.

Office cap rates in most major cities have decreased due to investors’ strengthening interest in opportunities outside of Tokyo.

Ex-Tokyo Office Market Cap Rate Trend





Office Market

Residential Market



Table of contents



Source: NRI based on data from “Housing and Land Survey”, Ministry of Internal Affairs and Communications of Japan.

Residential Market

About 20% of all households in Japan are living in non-public rental apartments, and the

percentage is trending upwards.

Households living in non-public rental apartments (excluding wooden apartments; hereafter the same in this section), which numbered

3.34 million in 1988, increased by about 2.6 times to 9.96 million (about 20% of all households) in 2013.

3,7604,097

4,4214,716

4,9895,238

1,411 1,578 1,682 1,724 1,783 1,857

334 490 650 750 879 996

9%

12%

15%16%

18%

20%

0%

5%

10%

15%

20%

25%

0

1,000

2,000

3,000

4,000

5,000

6,000

'88 '93 '98 '03 '08 '13

Ratio

of H

ou

seh

old

s Living in

Private

Re

ntal &

A

partm

en

t Ho

use

(no

n-w

oo

d)

Nu

mb

er o

f Ho

use

ho

lds

(un

it:1

0,00

0)

Households Living in HousingHouseholds Living in Rental HousesHouseholds Living in Private Rental & Apartment Houses (non-wood)Ratio of Households Living in Private Rental & Apartment Houses (non-wood)

Own House63%

Private Rental House,

Apartment House (non-

wood)20%

Private Rental Housing, Others

9%

Public Rental House

6%

Company Housing

2%

Breakdown of All Households by Housing Type (2013) Number of Households by Housing Type 1988 - 2013



Residential Market

The total number of moving households has decreased, but the ratio of households moving

to non-public rental apartments is trending upwards.

The number of moving households peaked out in 1994-98 and decreased to about 77% of the peak-time level in 2009-13 .

The number of households moving to non-public rental apartments is also on a decreasing trend, although its ratio to the total number

of moving households is trending upwards.

1,1031,186 1,221

1,1351,039

939

782884 868

778698

639

427532 557

502 466 447

39%

45% 46% 44% 45%48%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0

200

400

600

800

1,000

1,200

1,400

1,600

84-88 89-93 94-98 99-03 04-08 09-13

Ratio

of H

ou

seh

old

s Living in

Private

Re

ntal &

A

partm

en

t Ho

use

s

Nu

mb

er

of

Mo

vin

g H

ou

seh

old

s (U

nit

:10,

000)

Number of Moving Households in Past 5 Years

Number of Households Moved into Rental Houses

Number of Households Moved into Private Rental (Apartment) Houses

Ratio of Households Moved into Private Rental (Apartment) Houses

Housing Choices of Moving Households 1984 - 2013



Residential Market

The majority of households moving to non-public rental apartments moved within the same

city.

Looking at the former locations of households moving into non-public rental apartments in seven major cities, those that moved within

the same city were greater in number than those that moved in from outside the city.

Tokyo’s 23 wards and Osaka saw a decline in households moving into non-public rental apartments from outside the city, while major

regional cities saw no change.

28 30 28 31 32 28 27 33

165 157 148 137

56 57 55 55 73 61 53 50 27 27 23 22 47 46 41 4850 46 48 55 25 24 24 27

266

207 197 200

58 54 51 58

10586 77 73

36 37 32 3045 47 49 54

0

50

100

150

200

250

300

350

400

450

500

94-9

8

99-0

3

04-0

8

09-1

3

94-9

8

99-0

3

04-0

8

09-1

3

94-9

8

99-0

3

04-0

8

09-1

3

94-9

8

99-0

3

04-0

8

09-1

3

94-9

8

99-0

3

04-0

8

09-1

3

94-9

8

99-0

3

04-0

8

09-1

3

94-9

8

99-0

3

04-0

8

09-1

3

Sapporo Sendai Tokyo 23

Wards

Nagoya Osaka Hiroshima Fukuoka

Bre

akd

ow

n o

f In

-Flo

w H

ou

seh

old

s M

ove

d in

Pri

vate

Re

nta

l Ho

use

s (n

on

-wo

od

) (U

nit

:1,0

00)

Household moving in a city

Household moving out a city

Location Choices of Moving Households


Housing Stock by Type 1988-2013


Residential Market

The supply of non-public rental apartment units has increased more sharply than total

housing stock.

The growth of rental apartments (public and non-public combined) outpaced the growth of overall housing as well as the more modest

rise of rental housing in general.

As a result, the ratio of rental apartments to total rental houses increased from 60 to 70%.

Housing Growth Rates by Type

39 44

50 54

58 61

16 18

20 21 22 23

12 14 15 16

0

10

20

30

40

50

60

70

'88 '93 '98 '03 '08 '13

Ho

usi

ng

Sto

ck (U

nit

:1 m

illio

n)

Number of Houses

Number of RentalHouses

Number of Rental & Apartment Houses (non-wood)

100

107

114

119

103

108

112 112

124

130

80

90

100

110

120

130

140

'98 '03 '08 '13

Gro

wth

Rat

e (1

988

= 10

0)Number of Houses

Number of RentalHouses

Number of Rental & Apartment Houses (non-wood)


0

100

200

300

400

500

600

700

800

91

92

93

94

95

96

97

98

99

00

01

02

03

04

05

06

07

08

09

10

11

12

13

14

New

Ren

tal H

ousi

ng C

onst

ruct

ion

by R

egio

n(U

nit:

1,00

0)

Provincial Region

Kinki Region

Chuubu Region

Metropolitan Region

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14

Ratio

of R

en

tal Ho

use

s

Nu

mb

er o

f Co

nst

ruct

ion

Sta

rts（

Un

it：

1,00

0）

Own House Rental House Company House

House Built for Sale Ratio of Rental House

Source: NRI based on data from “Survey of Construction Work Started”, Ministry of Land, Infrastructure, Transport and Tourism of Japan.

Residential Market

Construction of new rental housing declined in 2009 but is now on a recovery path.

The number of new constructions decreased in 2014 as a reaction to last minute surge in demand prior to the tax increase.

The ratio of rental house has increased as the number of new rental housing has leveled off while the total number of new construction

has declined.

New Housing Supply Trend: 1991-2014 Breakdown of New Rental Housing Construction by Region


8

9

10

11

12

13

14

15

16

17

Jan

Mar

May Ju

l

Sep

No

v

Jan

Mar

May Ju

l

Sep

No

v

Jan

Mar

May Ju

l

Sep

No

v

2012 2013 2014

Ren

tal H

ou

sin

g V

acan

cy R

ate

(Un

it: %

)

All Tokyo areas

23 Tokyo districts

Tokyo cities

Kanagawa

Source: NRI based on data from “Report on Rental Housing Market”, TAS Corp. (Analyzed by TAS

Corp. Data Supplied by At Home Co., Ltd.).

Residential Market

Vacancy rates are rising in all of Tokyo’s 23 wards.

Vacancy rate in the metropolitan Tokyo has continued to decline for the past decade.

In the recent years, however, Tokyo has seen an upward trend of vacancy rates, especially in the 23 wards.

Affected by the Great East Japan earthquake in 2011, vacancy rates in Sendai has seen a significant shrinkage.

Source: NRI based on data from Data from “Housing and Land Survey”, Ministry of Internal Affairs

and Communications of Japan.

0%

5%

10%

15%

20%

25%

Sapporo Sendai Tokyo23

Wards

Nagoya Osaka Hiroshima Fukuoka

Vac

ancy

Rat

e o

f R

en

tal H

ou

sin

g (n

on

-wo

od

) (U

nit

:%) '98 '03 '08 '13

Vacancy Rates of Rental Housing (non-wood) in Major Cities Vacancy Rates of Rental Housing in Tokyo Metropolitan Area


86.0

88.0

90.0

92.0

94.0

96.0

98.0

100.0

102.0

104.0

106.0

108.0

91

92

93

94

95

96

97

98

99

00

01

02

03

04

05

06

07

08

09

10

11

12

13

14

Pri

vate

(An

nu

al A

vera

ge)

Re

nt

Ind

ex

(Bas

e Y

ear

20

10

)

Japan

Tokyo 23 Wards

Source: NRI based on data from “Consumer Price Index”, Ministry of Internal Affairs and Communications of Japan.

Residential Market

The rent level of non-public rental housing continues to fall.

The rent level of non-public rental housing rose steadily from 1990 to 2000, after which it gradually declined. The

rent level downward trend continued in 2013.

Rent in the Private Sector (Annual Average) – Nationwide and Central Tokyo


Source: NRI based on data from “ARES J-REIT Property Database”, Association for Real Estate Securitization of Japan.

Residential Market

Occupancy rates of REIT-owned and private fund-owned properties are rising, while their

rent levels remain stable.

Looking at the changes in the REIT-owned and private fund-owned occupancy rate and monthly rent, the monthly rent level has remain

stable although the occupancy rate in Tokyo’s 3 central districts and its 23 districts has been on an uptrend since 2012.

90%

92%

94%

96%

98%

100%

Jan

Mar

May Ju

l

Sep

No

v

Jan

Mar

May Ju

l

Sep

No

v

Jan

Mar

2012 2013 2014

Occ

up

ancy

Rat

e (U

nit

:%)

Tokyo 3 central districts

Tokyo 23 districts

Nagoya city

Osaka city

Fukuoka city

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

Jan

Mar

May Ju

l

Sep

No

v

Jan

Mar

May Ju

l

Sep

No

v

Jan

Mar

2012 2013 2014

Mo

nth

ly R

ent

Leve

l (U

nit：

Yen

/m2 )

Tokyo 3 central districts

Tokyo 23 districts

Nagoya city

Osaka city

Fukuoka city

Occupancy Rates of REIT-owned and private fund-owned Properties Monthly Rents of REIT-owned and private fund-owned Properties


Housing Ownership Rate in Japan

Source: NRI based on data from “Housing and Land Survey”, Ministry of Internal Affairs and Communications of Japan

Residential Market

The rate of housing ownership, which has a negative impact on rental housing demand, has

shown a downward trend with the 40-49 age group.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

1998 2003 2008 2013

70+

60-69

50-59

40-49

30-39

-29

(age)





Office Market

Residential Market



Table of contents



Note: The reported numbers for the fiscal years 2002 and 2008 include stores without floor space indication.


Development of large-scale retail stores has started to recover since 2009.

Source: NRI based on data from the Ministry of Economy, Trade and Industry’s “Large-scale Retail Chain Site Expansion Report”

2,455

3,3353,729

4,1784,545

3,9834,369

1,919 2,0812,351 2,193

2,860 2,824

450

638

786738 731 730 750

654

500

584620

738705

0

100

200

300

400

500

600

700

800

900

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Nu

mb

er of p

rojects(cases)

Flo

or

Are

a(1

00

0m

2)

（year）

Floor Area Number of projects

New Retail Space Supply vs. Number of Development Projects


NB: In the old SC standard, only shopping malls with more than 10 retail tenants were considered.

In the new SC standard, the shopping center must have more than 10 tenants including food stalls, service centers and retail

outlets.

On the same note, the shopping center must have more than 1,500 m2 retail space.


For shopping centers, the total floor area for all stores and the floor area per store are both

on the rise.

Source: NRI based on data from the Council of Shopping Centers’ “SC White Book”

30.6 30.4 31.5 33.1 34.6 36.5 38.0

42.1 42.7 44.2 45.7 46.4 47.9 11.8 11.6

12.1 12.4 12.8 13.2 13.6

14.1 14.2 14.5 14.8 15.0 15.3

0

2

4

6

8

10

12

14

16

0

10

20

30

40

50

60

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Floo

r area per sh

op

pin

g center

Ov

era

ll fl

oo

r a

rea

(year)

Overall floor area Floor area per SC(in 1 million m2) Old SC Standard New SC Standard (in 1000m2/store)

Overall floor area and per-store floor area for shopping centers


-3.4

-2.2-2.1

-1.6 -1.7

0.3 0.30.0

-1.5

-6.8

-2.0

-1.3

0.5

-0.50.1

-8

-7

-6

-5

-4

-3

-2

-1

0

1

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

(％)

Source: NRI based on the Japan Council of Shopping Centers’ “Overall Sales Statistics Report


Declining tendency of shopping center’s sales is mitigating.

Yearly comparison of existing shopping centers’ sales

Copyright（C） Nomura Research Institute, Ltd. All rights reserved. 58 Source: NRI based on from Cabinet Office “Consumer Trends Survey”


Abenomics has not changed consumer outlook dramatically.

▼ Dec. 2012

Liberal Democratic Party

becomes the ruling party

again

NB: Consumer outlook index calculation methodology:

Consumers are asked to rate their outlook for the next 6 months for the following 4 categories: “Lifestyle”, “Income”, “Job environment” and “Determining when to

purchase consumer durables” using a 5-scale index.

Each of the 5 scales is assigned a value: +1 for “Will get better,” +0.75 for “Will get somewhat better,” +0.5 for “Won’t change,” +0.25 for “Will get somewhat worse,”

and +0 for “Will get worse”. This numerical index is used to provide a component ratio for each of the answers, from which the results are calculated.

To illustrate, a value of 50 will be produced if all participates answer “Won’t change” for all available items.

0

10

20

30

40

50

60

Jan

Mar

May Ju

lSe

pN

ov Jan

Mar

May Ju

lSe

pN

ov Jan

Mar

May Ju

lSe

pN

ov Jan

Mar

May Ju

lSe

pN

ov Jan

Mar

May Ju

lSe

pN

ov Jan

Mar

May Ju

lSe

pN

ov Jan

Mar

May Ju

lSe

pN

ov Jan

Mar

May Ju

lSe

pN

ov

2007 2008 2009 2010 2011 2012 2013 2014

Consumer outlook index chart


0

10,000

20,000

30,000

40,000

50,000

60,000

Late 2011 Early 2012 Late 2012 Early 2013 Late 2013 Early 2014

Ginza

Omotesando

Ikebukuro

Shinjuku

Shibuya

Yokohama

Shinsaibashi

Oodori (Sapporo)

Sannomiya (Kobe)

Sendai

Tenjin (Fukuoka)

Shijokawaramachi (Kyoto)

Sakae (Nagoya)

（yen / month / tsubo）

Ginza

OmotesandoShinjukuShibuyaSakaeIkebukuro

NB1: Rent in Yokohama is shown to have spiked in the early half of 2012, but this can be attributed to the extremely small sample size

NB2: Rent in Shinjuku is shown to have spiked in the late half of 2012, but this can be attributed to a sample bias toward small, high-rent properties

NB3: Rent in Ikebukuro is shown to have dived in the early half of 2013, but this can be attributed to a sample bias toward low-rent properties in unfavorable locations

NB4:Rent in Shibuya, Sakae and Ikebukuro are shown to have spiked in the early half of 2014, which can be attributed to a sample bias towards a small number of

properties with high rent


Compared to other areas, rent level of Ginza, Omotesando and Shinjuku are still high.

Source: NRI based on the Japan Real Estate Institute

NB2

NB1 NB3

Tokyo Metropolitan

Area

Provincial Areas

1st floor rent ranking in 13 principal business areas (yen/month/tsubo)

NB4


0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

Metropolitan , Ginza

Metropolitan , Omotesando

Suburban, Nagoya

Metropolitan , Metropolitan, Osaka

Suburnban, TokyoSuburban, Osaka

Source: NRI based on the Japan Real Estate Institute’s “Real Estate Investor’s Survey”


Cap rates have been falling since 2011. In the Tokyo Metropolitan Area, cap rates are

approaching the all-time low.

NB:

Metropolitan high-class specialty stores:

Length of time after construction -or- large-scale repair/improvement: less

than 5 years

Tenants: Mainly retailers of high-class brands.

Rent system: Mainly fixed-term, variable rental schemes based on the

revenue.

Areas: Along Chuodoori in Ginza’s Chuo district.

Along Omotesando in Omotesando’s Shibuya district.

Suburban shopping centers:

Sales floor area: around 20,000m2

Key tenants: Prominent general merchandise stores (GMS)

Rent system: Mainly fixed-term, fixed-charge rental schemes

Areas: 1-hour Shinkansen ride along key stations to Tokyo’s Metropolitan

District

Stores for areas outside Tokyo follow similar locational conditions as above.

Commercial establishment cap rates (expected yield)



In evaluating a commercial district, the most heavily considered factor is its accessibility (i.e. inter-district factors), followed by

quantitative aspects such as choice of items/services and number of shops/facilities within a district.

Intra-district factors are also regarded important (i.e. mobility between shops/facilities). On the other hand, exclusivity of a district is not

heavily considered (i.e. presence of shops/facilities exclusive to the location, lack of similar shops/facilities around home/work).

Accessibility and density level of commercial facilities are the important factors in selecting

locations.

42%

22%

20%

19%

18%

16%

14%

12%

11%

8%

7%

6%

5%

41%

49%

48%

48%

45%

42%

36%

33%

35%

30%

26%

24%

20%

12%

21%

24%

24%

25%

28%

32%

33%

32%

31%

34%

33%

31%

5%

7%

9%

9%

12%

14%

18%

23%

23%

31%

33%

37%

44%

0% 20% 40% 60% 80% 100%

交通アクセスがしやすい

商品やサービスなどの選択肢が豊富である

店舗や施設の数が多い

様々な用途の店舗や施設がある

店舗や施設間の回遊がしやすい

その地域にしかない店舗や施設がある

公園などの休憩エリアが十分にある

自宅や就業地に近接している

自宅や就業地に同様の店舗や施設がない

様々な年齢や職業の人が来訪している

イベントなどが数多く開催されている

企業が集積している

店舗や施設の入替や更新が多い

とても重要である重要であるやや重要である重要でないn=41,273

The most heavily

considered factor

Very important Important Slightly important Not important

High accessibility

Abundant choice of items/services

Ample shops/facilities

Wide variety of shops/facilities

High mobility between shops/facilities

Shops/facilities exclusive to the location

Bountiful resting spaces

Proximity from home/work

Lack of similar shops/facilities around home/work

Presence of visitors from various occupations and age groups

High frequency of events

High density of companies

High frequency of realignment of shops/facilities

Quantitative aspects of

shops/facilities are

considered important

Exclusivity of a district is

not heavily considered

Important Factors in Selecting Commercial Districts by General Consumers (in Metropolitan Area)

Questionnaire name： Investigation about integrated area

Practitioner：NRI

Period of time：July 2014～August2014



Large scale development of commercial buildings will proceed mainly around Tokyo station.

Source：NRI based on the Sangyo-Times ”Commercial Facilities Schedule Guide”, Toyo Keizai Shinposha “National Supermarket Guide 2015”

Total store area of commercial buildings in metropolitanTokyo

(1,000m2）

NB)

Total area(Existing) includes department stores and specialty stores. Data as of May 2014

Total area(Future plan) is calculated via following formula: Total area(Future plan) = Site area × Floor area rate ×Commercial building rate × Shop floor rate

Note that the above-calculation is based on a presupposition that floor area rate, commercial building rate and shop floor rate to be 700%, 20% and 60%, respectively.

6%

15%

24%

7%0%

34%

8%

36%

0%

20%

40%

60%

80%

100%

0

50

100

150

200

250

300

350

Shin

juku

(We

st)

Shib

uya

Ote

mac

hi・

Mar

un

iou

chi

・Yu

raku

cho

Gin

za

Shin

juku

(We

st)

Nih

on

bas

hi・

Yae

su

・K

yob

ash

i

Ao

yam

a・O

mot

esa

nd

o

Ro

pp

on

gi

Total area(Future plan)

Total area(Existing)

New store rate





Office Market

Residential Market



Table of contents



Cargo quantity by transport method (FY2012) Automobile cargo quantity movement

NB: The chronological continuity of data from prior to 2009 could not be guaranteed due to the changes made to the in tallying methodology in the middle of 2010.


The truck-based transport volume (in tons), which forms the bedrock of Japan’s cargo

industry, has continued to decline in recent years.

Truck-based (automobile) transport is the primary transport method that constitutes a large share of Japan’s freight traffic.

In recent years, the volume of cargo transported via automobile has declined due to the downturn in the quantity of trucks sold for

private use.

Source: NRI based on the Ministry of Affairs’ “Transport quantity by transport method” and the Ministry of Land, Infrastructure, Transport and Tourism’s “Automobile Transport Statistics Survey”

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

'60 '65 '70 '75 '80 '85 '90 '95 '97 '99 '01 '03 '05 '07 '09 '11 '13

Business Personal

（1 million tons）

Motor vehicles 4,366,91%

Coastwise vessels 366,8%

Domestic aviation 1,0%

Railways

42,1%

Unit: 1 million tons


Industry-wide (except warehousing) distribution quantity by lot size

(unit: number of instances)

Warehousing distribution quantity per lot size

(number of instances)

Source: NRI based on the Ministry of Land, Infrastructure, Transport and Tourism’s “Logistics Census”


As the movement to smaller logistics lots progresses, the quantity distributed in such lots

appears to be in upward trend based on the number of instances.

As the movement to smaller logistics lots progresses across the whole industry, the quantity distributed has increased to a yearly rate of

4.0% based on the number of reported instances.

The increased quantity of distribution in warehouses is remarkably high. This increase is propelled by the increase in distribution

quantity using small lots that are less than 0.1 tons.

CAGR

4.5%

CAGR

3.7%

CAGR

7.3%

CAGR

12.6%

46.4%

59.2%

72.4%

0 500 1,000 1,500 2,000

2000

2005

2010

(thousandinstances)

Below 0.1t 0.1～0.5t 0.5～1t 1～5t Above 5t

64.4%

69.2%

75.3%

0 5,000 10,000 15,000 20,000 25,000

2000

2005

2010

(thousandinstances)

Below 0.1t 0.1～0.5t 0.5～1t 1～5t Above 5t


9.7

11.712.8

14.416.2

18.1

20.2

22.5

25.1

0

5

10

15

20

25

30

2012 2013 2014 2015 2016 2017 2018 2019 2020

（兆円）

Market Size of Business-to-Consumer e-Commerce

NB: Business –to-consumer e-commerce: sale of products and services to consumers in general via the Internet


Small-lot consignments increase, due partly to the expansion of e-commerce, which is

expected to continue growing hereafter.

Market size of Business-to-Consumer e-Commerce is expected to surpass 20 trillion yen in 2018.

Source: NRI

（trillion yen）


0

500

1,000

1,500

2,000

'88

'89

'90

'91

'92

'93

'94

'95

'96

'97

'98

'99

'00

'01

'02

'03

'04

'05

'06

'07

'08

'09

'10

'11

'12

'13

（㎡）Entire industry Other than transport Transport industry

0%

5%

10%

15%

20%

25%

0

10,000

20,000

30,000

40,000

50,000

60,000

'88

'89

'90

'91

'92

'93

'94

'95

'96

'97

'98

'99

'00

'01

'02

'03

'04

'05

'06

'07

'08

'09

'10

'11

'12

'13

(Buildings)Transport industry Other than transport Transport industry share

Nationwide number of supplied warehouses

including warehouses for transport and transport industry share Floor space per warehouse building

Source: NRI based on Ministry of Land, Infrastructure, Transport and Tourism’s “Construction Statistics”


While new supply has stopped dwindling, facilities are growing larger due to businesses

consolidating their logistics capabilities.

The number of supplied warehouse buildings fell to roughly 23% of the peak level in 1991 (12,000 buildings/year) which has stabilized

in recent years.

The number of supplied warehouse buildings for the transport industry is dwindling at a more relaxed pace compared to the rest of the

industry (see figure below left), but the floor space per building is on an upward trend (below right).

This explains the increased need for SCM support for generic enterprises and new/large-scale logistics facilities for logistics

consolidation.


0

100

200

300

400

500

600

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

(1 billion yen) Real estate industry Transport industry Others

Order volume for construction of warehouses/logistics facilities by ordering industry

Note: Only contracts worth 5 billion yen above are included


Development of logistics real estate, which had been shrinking since the Lehman shock, is

now back in full swing.

Source: NRI based on Ministry of Land, Infrastructure, Transport and Tourism’s “Construction Order Trends, Statistics and Survey”



Major foreign-based logistics property players and Japanese real estate developers are

gearing up for roadside development ahead of new expressway construction.

Narita Airport

Haneda Airport

Ken-O

Expressway Gaikan

Expressway

Joban

Expressway

Chuo

Expressway

Tomei

Expressway

Prologis Park Kitamoto Developer：Prologis Completion: Mar. 2014 Total floor area: 74,000 ㎡

MFLP Kuki Developer：Mitsui Fudosan Completion: Jul. 2014 Total floor area: 75,000 ㎡

Goodman Mizue Developer: Goodman Japan Dec. 2014 Leasable floor area: 58,000㎡

Logi-Port Hashimoto Developer：LaSalle, Mitsubishi Estate Completion: Feb. 2015 Total floor area: 157,000 ㎡

Goodman Ichikawa Developer: Goodman Japan Completion: Apr. 2015 Leasable floor area: 64,000㎡

GLP Ayase Developer：GLP Completion: Apr. 2015 Total floor area: 69,000㎡

GLP Zama Developer：GLP Completion; Jun. 2015 Total floor area: 132,000㎡

Prologis Park Ichikawa 3 Developer：Prologis Completion: Oct. 2015 Total floor area: 60,000㎡

Source: companies’ respective websites

Landport Atsugi Kaneda Developer: Nomura Real Estate Completion: Mar. 2015 Total floor area: 39,000㎡

Shinkiba Distribution Center Developer: IK Investment Ⅲ Completion: Aug. 2015 Leasable floor area: 46,000㎡

GLP Yachiyo Developer: Redwood Group Completion: Oct. 2015 Total floor area: 72,000㎡

MFLP Hino Developer: Mitsui Fudosan Completion: Oct. 2015 Total floor area: 213,000 ㎡

Redwood Namamugi Distribution Center Developer: Redwood Group Completion: Oct. 2015 Leasable floor area: 62,000㎡

Redwood Sakura Developer: Redwood Group Completion: Nov. 2015 Total floor area: 85,000㎡

GLP Sayama HidakaⅠ Developer：GLP Completion; Dec. 2015 Total floor area: 42,000 ㎡

Honmoku Distribution Center Developer: Mitsubishi Corp. Urban devt Completion: Dec. 2015 Total floor area: 71,000㎡

Prologis Park Yoshimi Developer：Prologis Completion: Dec. 2015 Total floor area: 109,000 ㎡

Landport Kashiwa ShonanⅠ Developer: Nomura Real Estate Completion: Feb. 2016 Total floor area: 50,000㎡

Goodman Business Park Chiba East Developer: Goodman Japan Completion: Mar. 2016 Total floor area:133,000㎡

Landport Kashiwa ShonanⅡ Developer: Nomura Real Estate Completion; Apr. 2016 Total Floor area: 56,000㎡

Moriya Logistics Center Developer：Orix Completion: Apr. 2016 Total floor area: 48,000㎡

Expressway

Expressway

(Planned)

New devts

Newly

operational



Sourcing turns increasingly competitive due to market entries by Mitsubishi Estate, Mitsui

Fudosan and Sumitomo Corporation and to IPOs of J-REITs.

Actions of Major Logistics Property Developers

2013 2015

Mitsubishi Estate

Mitsui Fudosan

Nomura Real

Estate

ITOCHU

Corporation

Mitsubishi

Corporation

Sumitomo

Corporation

Kenedix

ORIX Real Estate

GLP

Daiwa House

Prologis

LaSalle

Goodman

General

developer

“SHOSHA”

Independent

company

Foreign

capital

company

The first solo project in Fukuoka

(Start: Dec. 2013)

Entry into the logistics property market in partnership

with GLP （Start: Sep. 2012）

IPO of Nomura Real Estate Master Fund (REIT

of logistics and retail property) (Jun. 2013)

The Industrial and Infrastructure Fund holds

23 logistics properties acquired

at a price of 72 billion yen (as of Mar. 2014)

Cooperation agreement with Kokyo Tatemono on logistics

properties devt and establishment & management of private

funds. Sumitomo aims to develop logistics properties

worth 20 billion yen’s per year (Mar. 2014)

MITSUI

& CO., LTD

ACQ of 51% ownership of SG Realty Yokohama (logistics property) for 6.3

billion yen through a fund established with institutional investors （Apr. 2013）

Logistics property devt with Kenedix

(GFA 44,000㎡) (Begin: Apr. 2013)

ACQ of Zama and Chiba Logistics Centers by private fund

managed by Mitsui & Co Realty (Mar./Apr. 2014)

ACQ of Urayasu Logistics Center

by private fund managed

by Mitsui & Co Realty (Sep. 2013)

Sale of Saitama Logistics Property to Askul

for 15 billion yen (Jan. 2013)

ACQ of a 36,000㎡ site for logistics property

in Ichikawa, Chiba for 6.6 billion yen (Dec. 2013)

Devt of 2 logistics properties in Hidaka,

Saitama & Yachiyo, Chiba (GFA 200,000㎡)

(Compl. 2015/16)

IPO of Nippon Prologis REIT, Inc

(Feb. 2013)

Sale of 6 logistics properties

by a LaSalle-managed fund

for 74 billion yen (Oct.2013) Logistics property devt in

Mizue,Kanagawa (GLA 59,000㎡)

(Compl.Dec. 2014)

Logistics property devt in

Ichikawa, Chiba (GFA 57,000

㎡) (Compl. Oct. 2013)

Source: companies’ respective websites

Abbreviation

ACQ: Acquisition

Compl: Completion


Atsugi, Kanagawa (GFA 89,000㎡)

(Compl. Jun.2016) Devt of 2 logistics properties in

Yoshimicho, Saitama (GFA 100,000㎡)

(Compl. Dec.2015)

Devt of logistics properties in

Narashino & Inzai, Chiba

(GFA 190,000㎡)(Compl. Spring 2016)

Sale of Atsugi Distribution

Center to Nissay (Apr. 2014)

ACQ of 3 logistics properties in Kawasaki,

Kanagawa for 55 billion yen (Jul. 2014)

Devt of several logistics properties in Chiba.

When completed, they are said to be worth

100 billion yen. (Compl. March 2016)


Joso, Ibaraki(GLA 46,000㎡)

(Compl. Jun. 2016)

Cooperation agreement with

Fast Retailing on

logistics properties (Oct. 2014)

ACQ of 7 logistics properties by

Daiwa House REIT

for 48.4 billion yen (Mar. 2015)

ACQ of land for logistics property devt

in Tokyo and Chiba (March 2014)

Logistics property devt in Atsugi, Kanagawa

(GFA 40,000㎡)(Compl. Mar.2015)

Logistics property devt with

LaSalle in Sagamihara,

Kanagawa (Compl. Aug. 2013)

Logistics property devt with LaSalle in

Sagamihara, Kanagawa (Compl. Feb. 2015)

Devt of logistics properties in Yashio & Kuki,

Saitama (GFA 117,000㎡)(Compl. 2014)

Announced a plan to develop

three more logistics properties in the Tokyo

metropolitan area (March.2015)

Devt: Development

GFA: Gross Floor Area

GLA: Gross Leasable Area

Devt of 3 logistics properties

(GFA:200,000㎡) in Kanagawa and

Chiba after Oct.2014

Establishment of a private REIT

(diversified REIT, which also invests in

logistics properties)(Start: Jan.2015)


Monthly rent offers and vacancy rates of logistics real estate

NB: Logistics facilities which have a total lot area or total floor area of 10,000m2


Vacancy rate in Tokyo area, which was on a rise, has diverted downwards.

Source: NRI based on data from Ichigo Real Estate Information Service’s “Survey on the Logistics Facilities Rental Market”

Rent offer

Vacancy rates

Jul.2008

Jul.2010

Oct.2012

Jan.2015

Jul.2008

Jul.2010

Oct.2012

Jan.2015

3,000

3,500

4,000

4,500

5,000

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0%

(yen / month / tsubo) Tokyo area Osaka area


5.0%

5.5%

6.0%

6.5%

7.0%

7.5%

Oct

-05

Ap

r-06

Oct

-06

Ap

r-07

Oct

-07

Ap

r-08

Oct

-08

Ap

r-09

Oct

-09

Ap

r-10

Oct

-10

Ap

r-11

Oct

-11

Ap

r-12

Oct

-12

Ap

r-13

Oct

-13

Ap

r-14

Oct

-14

5.0%

5.5%

6.0%

6.5%

7.0%

7.5%

Oct

-05

Ap

r-06

Oct

-06

Ap

r-07

Oct

-07

Ap

r-08

Oct

-08

Ap

r-09

Oct

-09

Ap

r-10

Oct

-10

Ap

r-11

Oct

-11

Ap

r-12

Oct

-12

Ap

r-13

Oct

-13

Ap

r-14

Oct

-14

Single tenant Multi-tenant

NB: Single tenant: 2-3 floors; total floor area of around 10,000m2

NB: Multi-tenant: 3-4 floors; total floor area of around 50,000m2


Cap rates have been falling since 2012, with Tokyo hitting all-time low.


Tokyo(bay)

Tokyo(inland)

Chiba(inland)

Tokyo(bay)

Tokyo(inland)

Chiba(inland)

Logistics real estate cap rate (expected yield)





Office Market

Residential Market



Table of contents



12.7

15.1

0.9

14.4

0.4

0

4

8

12

16

20

Listed REIT Private Fund Private REIT RMBS CMBS

(¥tn)

Unlisted open-ended private REITs was offered in November 2010, and the size of private REITs market is growing rapidly.

Real Estate Investment Instruments

An overall perspective of the Japanese real estate market

Equity Type Debt Type

Listed Unlisted

Close-Ended Open-ended

Residential

Mortgage

Commercial

Mortgage

Overview of the Real Estate Investment Instruments in Japan

NB: Listed REIT figure is updated as of end of Jan 2015, private fund figure is updated as of end of Dec 2014, unlisted REIT is an estimated figure as of end of Oct 2014,

RMBS/CMBS figure is updated as of end of Sept 2014.

Source: NRI based on the Association for Real Estate Securitization, Sumitomo Mitsui Trust Research Institute Co., Ltd., and the Japan Securities Dealers Association


0

10

20

30

40

50

0

2,000

4,000

6,000

8,000

10,000

12,000

2001/9 2002/8 2003/7 2004/6 2005/5 2006/4 2007/3 2008/2 2009/1 2009/12 2010/11 2011/10 2012/9 2013/8 2014/7

(No. of J-REITs)(¥bn)

Market Capitalization No. of J-REITs

The J-REIT market began trading on the stock market in Sept 2001 with 2 companies traded and a market capitalization of 2.5 trillion

yen.

As of the end of January 2015, there are 49 companies traded worth approximately 10 trillion yen.


The J-REIT market capitalization has reached approximately 10 trillion yen.

J-REIT Market Capitalization and Number of J-REITs

Source: Bloomberg


5 Central Wards of

Tokyo37.8%

23 Wards of Tokyo18.2%

Kanto Area18.9%

Chubu Area

4.2%

Kinki Area13.1%

Other Areas7.9%

Office47.4%

Residential17.0%

Retail

18.2%

Hotel3.3%

Logistics

10.2%

Others

3.8%


Approximately 75% of real estate owned by J-REITs is in the Tokyo Metropolitan Area.

In recent years, J-REITs have become more diversified in type of property, and Healthcare REIT has started in November 2014.

Approximately 75% of J-REITs assets are located in the Tokyo Metropolitan Area, and

approximately 50% of J-REITs assets are office properties.

Greater Tokyo Area

74.9%

Approx. 12.7

trillion yen

Approx. 12.7

trillion yen

Asset Mix of J-REITs by Area and Asset Class

* As of the end of January 2015

Source: NRI based on ARES


0

500

1,000

1,500

2,000

2,500

3,000

2003/3 2004/1 2004/11 2005/9 2006/7 2007/5 2008/3 2009/1 2009/11 2010/9 2011/7 2012/5 2013/3 2014/1 2014/11

TSE REIT Index TOPIX TOPIX Real Estate Sector Index

The TSE REIT Indices has dropped sharply from its peak in May 2007, and has recovered rapidly from 2013.


The Tokyo Stock Exchange (TSE) REIT Indices have recovered from 2013.

TSE REIT Index, TOPIX, and the Listed Real Estate Industry Index

Source: NRI based on Bloomberg


0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

2002/1 2002/11 2003/9 2004/7 2005/5 2006/3 2007/1 2007/11 2008/9 2009/7 2010/5 2011/3 2012/1 2012/11 2013/9

Spread J-REITs Dividend Yield JGB 10-Year-Yield

J-REIT dividend yields rapidly increased to around 8%, but are currently down to around 3%.


J-REIT dividend yields are currently down to around 3%.

J-REIT dividend yield and Japanese Government Bond 10-year yield

Source: NRI based on Bloomberg, TSE.


-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

2002/12 2004/8 2006/4 2007/12 2009/8 2011/4 2012/12

AJPI: Total Return

AJFI: Total Return

According to the index based on actual performance of core funds invested in domestic real estate, the performance of real estate

investments in Japan recovered to positive in the capital return.


The performance recovered to positive in the capital return.

ARES Japan Property Index (AJPI) and ARES Japan Fund Index (AJFI)

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

2002/12 2004/8 2006/4 2007/12 2009/8 2011/4 2012/12

AJPI: Income Return

AJFI: Income Return

AJPI: Capital Return

AJFI: Capital Return

Source: NRI based on The Association for Real Estate Securitization (ARES) “ARES Japan Property Index” and “ARES Japan Fund Index”


9,702

14,81516,935

32,31130,260

20,955

16,276 16,352

12,143

7,537

11,1138,491 8,341

11,132

15,064

10,742 11,1489,741 10,760

3,511

1,994

6,937

4,370 7,418

7,679

8,75510,338

2,038

1,701

980

341 138

413

563

1,288 140153

5

0

10,000

20,000

30,000

40,000

50,000

60,000

20041st Half

20042nd Half

20051st Half

20052nd Half

20061st Half

20062nd Half

20071st Half

20072nd Half

20081st Half

20082nd Half

20091st Half

20092nd Half

20101st Half

20102nd Half

20111st Half

20112nd Half

20121st Half

20122nd Half

20131st Half

(¥100m)

RMBS CMBS CDO Lease Consumer Loan Shopping Credit Accounts receivable/Commercial Bills Others


Most recently, about 80% of residential mortgage-backed securities were originated by the Japan Housing Finance Agency.

CMBS issuance has decreased drastically since 2008, and at present only RMBS is issued

at a constant pace.

Asset Backed Securities Breakdown by Type of Backing and RMBS Breakdown by Originator

0% 20% 40% 60% 80% 100%

2004FY 1H2004FY 2H2005FY 1H2005FY 2H2006FY 1H2006FY 2H2007FY 1H2007FY 2H2008FY 1H2008FY 2H2009FY 1H2009FY 2H2010FY 1H2010FY 2H2011FY 1H2011FY 2H2012FY 1H2012FY 2H2013FY 1H2013FY 2H2014FY 1H

Housing Finance Agency Banks/Trust Banks Regional Banks Non-bank Others


Authors

SungYun KIM Lead author of Japan

Kim has been engaged in real estate related

consulting projects and research for years. His

current interest in real estate investment market

includes behavioral investment, market cycle

theory, demographic impact on real estate

market, real estate securitization, global real

estate investment, and financial crisis.

Akira DAIDO Author of Population Movements in Japan

and Residential Property Market

Daido is engaged in consulting and research

projects such as real estate and housing, electric

industry, and planning of business strategies.

Keita KAMEI Author of Logistics Property Market

Kamei is engaged in consulting and research

projects, undertaking real estate, housing ,

housing loan, and infrastructure-related

survey/research, as well as business strategy

planning.

Tomohiko TANIYAMA Author of Real Estate Investment Products

Taniyama is engaged in consulting and research

projects. His resent research theme is the

analysis of alternative investment market

including real estates and infrastructures, and

the development of new financial instruments

and new real estate economic models.

Hirokazu SAO Author of Retail Property Market

Sao is engaged in consulting and research

projects, mainly on real estate, housing and

infrastructure-related cases. Sao undertakes

survey/research as well as business strategy

planning.

Seiya HARIMA Author of Macro Fundamentals of Japan

Harima is engaged in consulting and research

projects such as real estate/infrastructure-

related survey/research, and planning of

business strategies.

Contact:

Nomura Research Institute, Ltd.

Consulting Division

Aya IMAI Editorial Assistant

Imai is engaged in research and consulting with

specific focus on real estate and housing

industries, primarily undertaking entry strategy

planning into foreign markets.

the japanese real estate investment market 2015 -...

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