Japan’s Real Estate Property Market in 2023 & Projections for 2024

Poste date: Monday, March 11, 2024

The following article was written by Ziv Nakajima-Magen – Partner & Executive Manager, Asia-Pacific Nippon Tradings International (NTI)


In 2023, Japan's real estate market demonstrated remarkable resilience and adaptability in the face of evolving economic landscapes, shifting societal norms, and technological advancements. The year was characterized by significant investment growth, with a notable 27% increase driven predominantly by domestic entities. This investment landscape was nuanced, shaped by anticipations of monetary policy adjustments and the lingering impacts of the global pandemic, which redefined work-life dynamics and consumer preferences across the board.

As we venture into 2024, the market is bracing for a complex interplay of factors. Supply-demand imbalances, potential monetary tightening, and the ongoing digital transformation across industries are set to redefine investment priorities and market dynamics. This expansive analysis delves into the core market sectors, outlining the trends observed in 2023 and projecting the shifts expected in 2024, all within the context of broader economic and societal changes.

Detailed Market Sector Analysis

Office Space

2023 Recap

The office space market in Japan experienced a significant dichotomy in 2023, with a clear preference for more affordable, existing buildings over new, premium-priced constructions. This trend emerged from a confluence of factors, including escalating rent prices, heightened fit-out costs due to global supply chain disruptions, and a strategic pivot towards cost-efficiency amidst economic uncertainties.

2024 Outlook

The coming year is poised to see a continued demand for office spaces, influenced by the gradual return to in-office work and the increasing importance of workspace quality and flexibility in talent attraction and retention. However, the anticipated influx of new supply, particularly in major urban centers, may lead to increased vacancy rates and exert downward pressure on rents. Adaptive reuse of older buildings and a surge in demand for spaces facilitating hybrid work models are likely trends that will shape the office space market in 2024.

Residential and Multifamily

2023 Recap

The resurgence of urban living, coupled with heightened demand for larger, multifunctional living spaces suitable for remote work, propelled the residential and multifamily sectors to new heights in 2023. Central Tokyo, in particular, saw a significant upsurge in property prices, reflecting a strong preference for convenience and quality of life.

2024 Outlook

As Japan's demographic landscape continues to evolve, with an increasing number of single-person households and a growing emphasis on lifestyle convenience, the multifamily sector is expected to remain a hotspot for investment. However, market participants will need to navigate potential headwinds, including the risk of interest rate hikes and the necessity for sustainable development practices, to capitalize on this demand.

Logistics and Industrial

2023 Recap

Driven by legislative changes and a strategic push towards strengthening domestic supply chains, demand for logistics facilities surged nationwide in 2023. Despite this demand, Tokyo experienced an oversupply, leading to increased vacancy rates. This scenario highlighted the need for strategic location selection and the importance of technological integration in logistics operations.

2024 Outlook

The logistics sector is on the cusp of transformation, with digitalization and automation set to play pivotal roles in enhancing operational efficiency and resilience. The impending "2024 problem" related to truck driver regulations will necessitate innovative solutions, including the adoption of autonomous delivery vehicles and the development of strategically located micro-hubs to maintain service levels amid regulatory challenges.


2023 Recap

The retail sector saw a remarkable recovery in 2023, with prime location rents reaching pre-pandemic levels. This resurgence was fueled by a rebound in consumer confidence, a revival in domestic and international tourism, and an acute shortage of premium retail spaces, particularly for luxury brands.

2024 Outlook

Looking ahead, the retail landscape is expected to evolve further, with experiential retail and digital integration becoming increasingly central to the consumer experience. Retailers and property developers will need to innovate continuously to create engaging, multi-channel shopping experiences that resonate with a diverse consumer base.


2023 Recap

The hotel sector emerged as one of the most dynamic segments of Japan's real estate market in 2023, driven by a robust recovery in travel and tourism. Despite facing challenges related to rising construction costs and labor shortages, the sector attracted significant investor interest, particularly in properties catering to international tourists.

2024 Outlook

The hotel industry is poised for continued growth, with sustainability and technology adoption becoming key differentiators. The increasing demand for unique, culturally immersive travel experiences, coupled with the rise of eco-conscious travel, is expected to drive the development of boutique hotels and eco-resorts, further diversifying Japan's hospitality landscape.


As we project into 2024, Japan's realestate market stands at a crossroads, influenced by macroeconomic trends, technological innovations, and evolving societal values. The agility and foresight demonstrated by market participants in navigating these shifts will be instrumental in unlocking new opportunities and driving sustainable growth across sectors. From the revitalization of office spaces to accommodate the future of work, to the strategic development of residential and multifamily units that cater to changing demographic needs; from the transformation of logistics operations through technology to the innovative evolution of retail and hospitality to meet emerging consumer expectations, the Japanese real estate market is poised for a period of significant transformation and growth.

In this dynamic environment, stakeholders across the spectrum — from investors and developers to operators and end-users — will need to remain vigilant and adaptable, leveraging deep market insights and strategic foresight to navigate the complexities of the market. The ability to anticipate changes, adapt strategies accordingly, and embrace innovation will be key to capitalizing on the emerging opportunities and addressing the challenges that lie ahead.

As the market continues to evolve, it will be essential to monitor these trends closely, adapting and innovating in response to the shifting landscape. The resilience and dynamism of Japan's real estate market, underpinned by strong fundamentals and a forward-looking approach, provide a solid foundation for continued growth and success in the years to come.

Through strategic investment, thoughtful development, and a commitment to sustainability and innovation, the sector can look forward to a future that is not only profitable but also responsive to the changing needs and aspirations of society, ensuring that Japan's real estate market remains vibrant, diverse, and sustainable for generations to come.

This comprehensive analysis, grounded in the trends and developments observed in 2023 and the projections for 2024, offers a roadmap for navigating Japan's real estate market. It underscores the importance of strategic agility, innovation, and sustainability as key drivers of success in an increasingly complex and rapidly changing market landscape.


Sources –

Price Waterhouse Coopers” & “Urban Land Institute” – “Emerging trends in real-estate, Asia-Pacific, 2024
CBRE Research APAC” – “Japan Market Outlook Report 2024
Japan Property Central” – “Japan Property Market Report 2023
Savills Research” – “Japan Hospitality & High-End Tourism” spotlight articles