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Japan Emerges as a Cross-Border Real Estate Investment Hub: Growth in Both Inbound and Outbound Investment

12/11/2026

Cross-Border Real Estate Transactions Survey, H1 2026

Cross-border real estate investment is shifting from a phase driven by yield differentials and currency advantages to one focused on capturing the structural growth of individual markets. This report analyzes the latest trends in foreign investment into Japan's real estate market and overseas real estate investment by Japanese investors, examining changes in capital flows, key sectors, and investment opportunities across major markets.

Executive Summary

Global

  • In the commercial real estate (CRE) market, investor appetite continues to recover, supported by moderate GDP growth and the stabilization of market fundamentals.
  • Transaction volumes have increased across all sectors, with offices and data centers leading growth.
  • Cross-border investment is on an upward trajectory, with the Americas and Asia Pacific serving as the primary recipients of overseas capital. Within Asia Pacific, the share of foreign investors has risen in Singapore, India, Japan and South Korea.

Definitions of Terms Used in This Report

  • Foreign Investor: Refers to a buyer whose headquarters are located outside the country or region where the subject property is located.
  • Japanese Investor: Refers to a buyer whose headquarters are located in Japan.

Cross-Border Real Estate Transactions Survey, H1 2026

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Inbound Investment into Japan

  • Real estate investment in Japan has continued to increase since 2023, with foreign investors accounting for about 39% of investment volume in H1 2026.
  • Attractive yield spreads have historically supported capital flows into Japan; however, recent interest rate hikes have narrowed this advantage.
  • Key sectors attracting foreign capital are: 
Office
Lowest vacancy rates in the Asia Pacific region and expectations of continued rental growth.
Residential
Highly favored sector due to large investable market and strong underlying fundamentals.
Data Centers
Japan continues to grow as one of Asia’s largest data center markets. The country serves as a major landing point for submarine cable systems connecting Asia with the west coast of North America, reinforcing its role as a regional digital hub. Long-term economic growth policies, political stability, and a proactive approach to AI investment further enhance its appeal.

Outbound Investment by Japanese Investors

  • Japanese investors continue to expand overseas investments, focusing on the U.S., UK, Australia, and India.
  • Growth narratives in Australia, driven by population growth and housing shortages, and in India, supported by the expansion of Global Capability Centers (GCCs) and the technology sector, are attracting interest from Japanese investors.

The report also provides a comprehensive analysis of the following perspectives.

  • Global Real Estate Investment Volumes Continue to Recover
  • Cross-Border Investment: Japan, Australia, and India Attract Growing Foreign Capital in Asia Pacific
  • Foreign Investor Participation in Japan's Real Estate Market 
  • Outbound Investment: Japanese Investors Pursue Structural Growth Opportunities Overseas

Contacts

Hideaki-Suzuki_Headshot_JP
Hideaki Suzuki

Executive Director, Head of Business Development Services & BD Lead of Investment Asset Management, North Asia, Head of Research, Japan
Chiyoda-ku, Japan

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Hiroyuki-Takayama_Headshot_Japan
Hiroyuki Takayama

Senior Director
Chiyoda-ku, Japan

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Ayaka Hayashi Square.jpg
Ayaka Hayashi

Research Director
Chiyoda-ku, Japan

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