Although Japan has regained some favor with investors as one of Asia’s hot markets, some managers are somewhat wary that the country may be headed for a correction. At the PERE Summit Asia in Hong Kong, however, Grosvenor’s chief executive for the Asia-Pacific region, Nicholas Loup, explained why he thinks the land of the rising sun is back on a healthy trajectory.
Now that Japan has “the strongest government since Koizumi in 2004,” the economic reforms of Abenomics are beginning to fundamentally change the economy. Businesses are picking back up, which is feeding into the office market; tourism has been increasing “almost vertically,” especially from mainland China; and retail sales also have been picking up. “This time, I think the roots of recovery are quite deeply formed,” Loup told PERE.
Indeed, if it stays on the trajectory it’s on now, Loup posited that Tokyo could become the London of Asia in terms of its real estate and general economic importance. No other city in the region has as much diversity to offer, or as many business ties to so many different countries, he pointed out. Tokyo also is one of the few cities that have hosted the Olympics twice – London being one other such city.
This has attracted the attention of many international investors and, like in any property market, Loup warned that they will have to find partners on the ground that they can trust while being wary of rising prices. However, he thinks that the comparison of London and Tokyo’s property markets is a justified – and interesting – one in the long term.