Japanese snap up overseas properties in spending spree

Most are taking long-term view to diversify income, given the low returns in Japan

TOKYO - Japanese investors are spending the most in two decades to buy up properties overseas, undeterred by the global real estate slump and the yen’s decline to a 50year low.

A Manhattan skyscraper, data centres in Toronto and office buildings in London are among the assets that Japanese companies and pension funds have scooped up in 2023.

Flush with cash and in the only developed economy with access to rock-bottom financing rates, their purchases are giving some relief to the market as rising office vacancies and interest rates keep other buyers away.

“They see a window of opportunity at the moment in which they can be more competitive,” said Mr Alex Foshay, head of real estate firm Newmark Group’s International Capital Markets Group.

Japan-sourced capital has accounted for US$7.4 billion S$9.9 billion) of global commercial real estate transactions so far in 2023, more than three times the annual average in the past 15 years, according to MSCI Real Assets.

Spending on that scale from Japan has rarely been seen since the late 1980s, when the nation’s asset bubble fuelled purchases of iconic places such as Rockefeller Center and Pebble Beach Golf Links.