Osaka in japan saw a 2.1 percent rise in its office building value as of October 2023, the top among 15 cities globally, while Hong Kong maintained a 1.3 percent drop since April, according to Global Property Value and Rent Indices.
Despite a global downturn in property prices due to a high-interest environment last year, Japan maintained loose monetary policies and stable rental demand.
It continued to attract global real estate investment, especially in commercial and residential properties.
Japan’s biggest real estate appraisal and consulting firm, Japan Real Estate Institute, released the indices, which covered 15 major cities in Asia, the United States, the United Kingdom, and Australia, analyzing new buying and leasing contracts for commercial and residential properties to calculate price and rent per square meter.
It is the third consecutive time Osaka has ranked first in office building price growth since October 2022. Following Osaka, Ho Chi Minh City in Vietnam saw a 0.8 percent increase, and Tokyo experienced a 0.6 percent rise.
Compared to Tokyo, office building prices in Osaka are lower, and the return on investment is higher. The investment return rate was 4 percent in Osaka’s Umeda and 3.2 percent in Tokyo’s Marunouchi and Otemachi.
Hong Kong saw 1.3 percent and 0.9 percent drops in its office building value and rents, remaining in the middle to lower range among the 15 cities globally.
The survey also found that New York had the most significant drop in office building prices, decreasing by 6 percent, followed by Sydney with a 4.4 percent decline and London with a 3.5 percent decrease. In China, where real estate companies faced operational challenges, Beijing saw a 2.9 percent drop, and Shanghai experienced a 2.6 percent decline.
Property agency Miki Shoji’s data revealed that as of October, the vacancy rate for office buildings in the central five districts of Tokyo (Chiyoda, Chuo, Minato, Shinjuku and Shibuya) reached a new low of 6.10 percent, the lowest in two years and five months.
In the residential sector, Tokyo Kantei’s data indicated that due to strong demand from overseas investors, second-hand apartment prices in central Tokyo have continuously hit new highs for 10 consecutive months since 2002.
Residential rents in the Tokyo metropolitan area reached the highest level in nine years in November 2023, with a monthly increase of 0.1 percent.
Since August, residential rents in the Tokyo 23 wards have risen by 11 to 12 percent monthly, maintaining double-digit growth for three consecutive months for the first time in the past 15 years and significantly higher than the average of around 5 percent in the first half of the previous year.
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