Low borrowing costs influence foreign investment in real estate

Global Business

Japan`s property market is attracting a growing number of foreign buyers. This year may see the highest proportion of overseas investors in seven years with more of the money coming from China. CCTV`s Mike Firn filed this report from Tokyo.

Low borrowing costs influence foreign investment in Japanese real estate

Low borrowing costs influence foreign investment in Japanese real estate

Japan`s property market is attracting a growing number of foreign buyers. This year may see the highest proportion of overseas investors in seven years with more of the money coming from China. CCTV`s Mike Firn filed this report from Tokyo.

Low borrowing costs, rising rents and forecasts of economic recovery are feeding double-digit growth in Japan`s property market.

After 18 percent expansion in 2014, Jones Lang LaSalle says investment will rise as much as 20 percent this year.

“We have a huge stock in the market to invest and also we have a high liquidity for transactions in the market and also further rental increase is expected in this year too,” said LaSalle.

Foreigners were behind a fifth of last year`s deals, forecast to rise as high as a quarter this year.

A growing number of buyers are from China. Fosun Group spent more than $625 million on four buildings in central Tokyo last year.

The weaker yen isn’t a big deciding factor for large foreign corporations who hedge against currency moves, but it is encouraging smaller investors to buy residential properties.

Grosvenor Asia Pacific bought 99 units in a high end Tokyo apartment block in 2011 when many foreigners fled the market after the earthquake and tsunami. They started marketing them in 2013 and already have sold more than half. Mainly to people from Hong Kong, Taiwan and Singapore.

“The Japanese yen is depreciating by a significant 20 percent this makes really attractive for foreign interests to come to the Tokyo market,” said Koshiro Hiroi, managing director at Grosvenor Asia Pacific.

Tokyo real estate prices are still staying relatively attractive in comparison to places like London, Hong Kong and New York.

“They were looking for overseas investment. Not Japan, but in Singapore, Thailand and England, all those locations but because of the recent yen depreciation they start paying attention to the Japanese market and the reason why they were not here before is mainly lack of information,” said Masanori Takeda, Century 21 SKY Realty senior partner.


CCTV’s Karina Huber reports on how Chinese investors are snapping up properties in the United States.

Chinese buying up iconic properties in US

Chinese buying up iconic properties in US

CCTV's Karina Huber reports on how Chinese investors are snapping up properties in the United States.


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