Strong fundamentals support Japan real estate outlook into 2026

Investor appetite remains robust across sectors.

Japan’s real estate market continues to demonstrate resilience despite global headwinds and rising interest rates, underpinned by stable economic performance and strong corporate profits, according to Savills.

Savills highlighted broad-based strength across sectors. The logistics segment is gaining momentum on the back of solid e-commerce fundamentals and stabilising vacancy, while hospitality and high-street retail are benefiting from rising tourism and increased consumer spending, with regional markets also showing growth.

The residential sector is experiencing firm rental growth, supported by favourable demographics, while the office market remains underpinned by ultra-low vacancy and limited new supply, creating conditions for further rental upside.

In Tokyo, Grade A office rents rose by 1.9% quarter-on-quarter in Q4 2025 to JPY37,586 per tsubo, as vacancy tightened to just 0.4%, down 0.1 percentage points from the previous quarter, Savills said. Demand continues to be driven by occupiers seeking high-quality office space with premium amenities to attract and retain talent.

Overall, Savills noted that investor appetite remains robust across Japan’s property sectors, with momentum expected to carry into 2026 as supportive fundamentals persist.