The commercial real estate market in Japan is in desperate need of an increase in the number of transactions, it has been suggested.
Investment in office and retail property has fallen by over 20 per cent over the two and a half years to the end of the third-quarter of 2010, figures have shown. As a reflection of the weak economic growth in the country, the market has posted record capital depreciation, IPD has revealed.
Despite remaining the second largest commercial market in the world, the annual rate of capital depreciation was -6.3 per cent at the end of September 2010. This was the shallowest rate of capital decline since December 2008 and a significant improvement on the -12.2 per cent growth rate in September 2009.
"There is no immediate end in sight to the two and a half year unbroken period of capital write-downs. Each quarter brings, at best, modest improvements. The market would benefit from increased transactions, which would boost confidence and provide a deeper insight into the property fundamentals," said Toshiro Nishioka, managing director at IPD Japan.