The United States continued to attract the largest volume of global direct real estate investment during the first three quarters of 2025, followed by the United Kingdom and then Japan. Tokyo ranked as the leading global city in terms of investment volume in dollar terms, despite the depreciation of the yen.
Tighter monetary policy in Japan poses a challenge, but financing costs remain relatively low, preserving a positive margin for real estate investment. The office sector has stood out in particular, supported by the return to in-person work, a sharp labor shortage, and growing demand for high-quality office space in central Tokyo.
Delays in development projects have also contributed to reduced supply, pushing the vacancy rate in the five central wards down to 0.9% while rents rose by 7.5% compared with the previous year.
The market points to a continued balance between limited supply and demand, with expectations of further rental growth and an acceleration in rent increases driven by strong demand and persistently low vacancy rates.
