asian_real_estate_2015_en.pdf

8/19/2019 asian_real_estate_2015_en.pdf

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The Asian Real Estate Market 2015

Viewpoints from Japan, China, Korea, Taiwan, Singapore and India

August 2015

Nomura Research Institute

Marunouchi Kitaguchi Bldg. 1-6-5 Marunouchi, Chiyoda-ku,Tokyo 100-0005, Japan


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,

to enhance business activities among real estate firms.

This report has been produced by Nomura Research Institute solely for information purposes. It is not intended to be a

complete description of the markets or developments to which it refers. No warranty for representation, express or implied is

made as to the accuracy or completeness of any of the information herein and Nomura Research Institute shall not be liable

Copyright（C） Nomura Research Institute, Ltd. All rights reserved. 1

.


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Japan Japanese Real Estate Investment Market

China China’s market entering an adjustment period

Korea Increase of li uidit within slow economic rowth

Taiwan Overview of Office, Residential and Hotel Markets

Singapore Domestic real estate market reaching its peak

India Real Estate Market in India – Residential, Office, etc.



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China China’s market entering an adjustment period

Korea Increase of li uidit within slow economic rowth

Taiwan Overview of Office, Residential and Hotel Markets

Singapore Domestic real estate market reaching its peak

India Real Estate Market in India – Residential, Office, etc.



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1 Population Movements in Japan

3 Overview of Real Estate Investment Market in Japan

4 Office Market

5 Residential Market

6 Retail Property Market

7 Logistics Property Market

8 Real Estate Investment Products



6/272

Population Movements in Japan

’ .

The number of households will also be decreasing soon.

. , .

The population of 65 years or older is expected to level off in 2025 and head downwards in 2040.

Population and Households in Japan

Forecast→← Actual

60,000140,000

Households

(thousand)Population

(thousand)

40,000

50,000

100,000

120,000

0‐14

20,000

30,000

40,000

60,000

,15‐64

65+

Household

0

10,000

0

20,000


Source: NRI based on National Institution of Population and Social Security Research

Note: Medium-fertility (medium-mortality) projection

1 9 7 1 9 7 1 9 8 1 9 8 1 9 9 1 9 9 2 0 0 2 0 0 2 0 1 2 0 1 2 0 2 2 0 2 2 0 3 2 0 3 2 0 4 2 0 4 2 0 5 2 0 5 2 0 6


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Population Movements in Tokyo

Population continues to increase in Greater Tokyo.

.

Net Population Inflow into Greater Tokyo

200

250

Population

(thousand)

100

150

KanagawaInflow

0

50

Chiba

Saitama

Tokyo

‐100

‐50

Outflow


‐150

Source: NRI based on Basic Resident Register Population Migration Report


8/272


Population and households are projected to decrease in Tokyo in 5 to 10 years time.

, , .

Population in Greater Tokyo Households in Greater Tokyo

16,000

18,000

Households

(thousand)40,000

Population

(thousand)Forecast→← Actual Forecast→← Actual

12,000

14,000

Chiba

Saitama25,000

30,000

,

Chiba

Saitama

6,000

8,000

,

Tokyo

15,000

20,000

anagawa

Tokyo

0

2,000

4,000

0

5,000

,

0 5 0 5 0 5 0 5 0 5 0 5 0 5 0


1 9

7

1 9

7

1 9

8

1 9

8

1 9

9

1 9

9

2 0

0

2 0

0

2 0

1

2 0

1

2 0

2

2 0

2

2 0

3

2 0

3

2 0

4




9/272


-

of one-person households.

.

Number of Households by Family Composition

7,000

Households

(thousand)Forecast→← Actual

5,000

6,000

One‐person

Couple‐only

2 000

3,000

, oup e‐an ‐c ren

One‐parent‐and‐child(ren)

Other

0

1,000


1995 2000 2005 2010 2015 2020 2025 2030 2035




10/272


Tokyo Bay.

, .

In seven wards, the population is projected to decrease by over 10% between 2010 and 2040.

Population Trends in Tokyo (2010=100)

Chuo 100.0 112.9 115.3 116.6 116.8 116.1 114.4Koto 100.0 102.7 104.4 106.8 108.2 108.8 108.5

Minato 100.0 105.0 107.0 107.9 107.8 107.0 105.2

Shinjuku 100.0 103.3 104.4 104.8 104.4 103.4 101.6Nerima 100.0 103.8 105.1 105.3 104.5 102.9 100.6

Sumida 100.0 100.8 101.7 102.6 102.7 102.0 100.6

Arakawa 100.0 102.4 103.0 102.8 102.2 101.2 99.7Chiyoda 100.0 106.9 106.9 106.1 104.6 102.2 99.3

Setagaya 100.0 102.1 102.7 102.4 101.5 100.0 97.9

Shinagawa 100.0 102.4 102.9 102.7 101.7 100.0 97.8Edogawa 100.0 101.5 101.7 101.1 99.8 98.2 96.2

Bunkyo 100.0 101.8 101.9 101.3 100.1 98.2 95.7Toshima 100.0 107.3 106.1 104.5 102.2 99.2 95.3

Ota 100.0 101.6 101.6 100.8 99.4 97.5 95.1Itabashi 100.0 100.9 100.5 99.1 97.2 94.7 91.8eguro . . . . . . .

Taito 100.0 100.6 99.5 97.7 95.4 92.6 89.4

Shibuya 100.0 100.3 98.8 96.6 93.9 90.9 87.4Nakano 100.0 99.4 97.7 95.5 92.9 89.8 86.2

Kita 100.0 99.4 97.6 95.1 92.2 89.0 85.5


. . . . . . .

Katsushika 100.0 98.2 95.7 92.4 88.7 84.8 80.8Adachi 100.0 98.0 95.2 91.6 87.5 83.1 78.7




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4 Office Market







12/272

Macro Fundamentals of Japan

’

forecasts for future growth.

’ .

Real GDP growth rate of major economies

Estimate→← Actual

10.0

15.0 ← Actual Estimate→

ChinaIndia

Korea5.0

JapanUK

0.0

‐10.0

‐5.0


Source: NRI based on IMF data (2014 Oct. and 2015 Update)

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


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Despite the weak growth, Japan remains one of the largest economies in the world.

, ,Japan by 2020, assuming current growth rates continue.

Nominal GDP of Major Countries

25,000

on

US

Forecast→← Actual

15,000

,

China

10,000

Ja an

0

5,000


2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Source: NRI based on IMF (2014 Oct.)

Note: Figures up to 2019 are IMF forecasts and those up to 2020 are calculated with the assumption that the CAGR from 2014 to 2018 will be maintained.


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,

tax increase.

, .

’

4.0 （％）

ear-on- ear ange n apan s onsumer r ce n ex exc u ng res oo s

2.0

3.0

Inflation targetset by BOJ

0.0

1.0

‐2.0

‐1.0


‐

3.0

Source: NRI based on Japan Ministry of Internal Affairs data


15/272


Yen still continues to decline.

- “ ” , , .

(USDJPY=X)

USD-JPY exchange rate

120

130

100

110

90

70

80


Source: NRI based on Bloomberg data


16/272


Trade deficit is expanding, while the current account surplus is shrinking.

’ ,2014.

Japan’s Current Account

25

30

35

10

15

20

0

5

‐15

‐10

‐

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 (年)


Source: NRI based on Japan Ministry of Finance data

貿易収支サービス収支第一次所得収支第二次所得収支経常収支Trade Balance Service Balance Primary income balance Second income balance Current Account


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Government debt has mounted, raising concerns about a potential financial collapse.

’ .

A surplus in the primary balance, which is one of the conditions for preventing financial collapse, is expected to be difficult to achieve atleast for the next several years.

Forecast→← Actual Forecast→← Actual

4（％）

UK250

（％）

‐2

0

2

US

Germany200

‐6

‐4

100

150

US

‐10

‐8

50

UK

Germany

Copyright（C） Nomura Research Institute, Ltd. All rights reserved. 16Source: NRI based on IMF data (2014 Oct.)Source: NRI based on IMF data (2014 Oct.)

‐1

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

2 0 0 9

2 0 1 0

2 0 1 1

2 0 1 2

2 0 1 3

2 0 1 4

2 0 1 5

2 0 1 6

2 0 1 7

2 0 1 8

2 0 1 9

0

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

2 0 0 9

2 0 1 0

2 0 1 1

2 0 1 2

2 0 1 3

2 0 1 4

2 0 1 5

2 0 1 6

2 0 1 7

2 0 1 8

2 0 1 9


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to circulate.

investors.

Household financial assets, which are a resource for government bond purchases, have increased due to rising stock prices in recentyears.

’

1600

1800 (Trillion yen)100%

1200

1400

60%

600

800 40%

200

400

0%

20%

Japan US UK Germany


Source: NRI based on Bank of Japan data

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Note: Figures for Japan and US are from Dec 2014; for UK and Germany, from 2014 Q3.

Source: BoJ, FRB, ONS, Bundesbank

Domestic inve stors For eign investors


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Tokyo continues to be the world’s largest city in terms of population and GDP.

Tokyo

40,000

GDP/population estimation in 2025 (Top 30 cities of population)

2025 population

by city’

Delhi

Shanghai

Bei in

30,000

35,000

MumbaiDhaka

Mexico CitySao

PauloCairo

New York

Buenos Aires

20,000

25,000

Los AngelesParis

10,000

,

0

,

0 500 1000 1500 2000 25002025 GDP scaleby city（in billion USD at


2008 PPPs ）

Source: NRI based on PricewaterhouseCoopers and UN data


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Tokyo has the second largest concentration of world-class enterprises.

Rank Company Revenue(Mil$)

Number of Fortune Global 500 companies by city (2014) Fortune Global 500 companies in Greater Tokyo (within top 200)

,

45 Honda Motor 118,210

51 JX Holdings 111,014

53 Nippon Telegraph & Telephone 109,054Beijing, 52

,

78 Hitachi 95,988105 Sony 77,532

108 Mitsubishi 75,755

Tokyo, 41

London, 18

Paris, 18,

135 Softbank 66,546

139 Tokyo Electric Power 66,194

145 Toshiba 64,907E 2

New York, 17

Seoul, 14

Osaka, 8

Others, 310

,

164 Dai-ichi Life Insurance 60,340

173 Mitsui 57,302

176 Seven & I Holdings 56,572

2

,

Houston, 7

Moscow, 7


,

199 Mitsubishi UFJ Financial Group 51,667

Source: NRI based on Fortune Global 500 (2014) data


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4 Office Market







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Overview of Real Estate Investment Market in Japan

Investors’ activities has been recovering to the 2005-2006 level.

In 2013 J-REIT the most owerful real estate bu er in Ja an ac uired assets of more than 20 billion USD. In 2014 however J-REIT lost its dominance to other investors such as private-REITs, high-net-worth individuals and corporations with more aggressive attitudetowards acquiring assets. Other professional investors are also being ousted from the Tokyo market.

Acquisitions of Securitized Real Estate

10,000

Others J‐REIT

on yen

6,000

,

4,439

5,159

, ,

2,156

4,000

611 305 676 895

1,772 2,031 1,679

628 439 604 792

1,5552,237

2,1232,236

3,307

2,210

1,359539

1,549

,

0

2,000

Copyright（C） Nomura Research Institute, Ltd. All rights reserved. 21Source: NRI based on MLIT

FY2001 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013


23/272


, . . , ,

and logistics properties. Factors such as the 2020 Olympic game in Tokyo, weak JPY currency, and strong macro economy in Japan have helped to push the

demand in hotels, attracting more investors to hotel investment.

Acquisitions of Securitized Real Estate by Asset Class Allocation of Securitized Real Estate by Asset Class

in 5 years (2009-2013)

8,000

Office Residential Retail Logistics Hotel Others

billion yen

Others 16.0%

1,107 981

6,000

Office, 33.8%

Hotel, 3.3%

267 686808

1,293 1,5891,321

603161

404

835

790

452

788

615

746

2,000

,

Residential, Retail, 16.0%

,

13.8%

1,611

710

1,516 1,7282,194 2,124

2,503

891556 768 512

1,092 1,501

552 348

235441

406

550270 479

289

252309

0FY2001 FY2002 FY2003 FY20 04 FY2005 FY2006 FY200 7 FY2008 FY2009 FY2010 FY2011 FY2 012 FY2013

.


o e: ecause e u y o secur za ons a requ re ac ua s unc ear, ey ave no een nc u e a er . ecause o s, e year y o a s an amoun s w no ma c up w e ocumen s

cited for this entry.Source: NRI based on Ministry of Land, Infrastructure, Transport and Tourism’s “Survey of the Current State of Real Estate Securitization”


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Lack of assets in Tokyo is likely to cause investment money to head to other regions.

For last few ears it has been extremel difficult for investors to find investment o ortunities in Tok o. In 2014 and 2015 transactions in the ex-Tokyo area are expected to increase significantly in a trend similar to the one seen in pre-global financial crisis era.

51.9% 13.3% 10.0% 3.7% 17.8%FY2013

Tokyo Greater Tokyo Osaka Nagoya Fukuoka Others

58.8%

47.9%

12.0%

15.3%

8.0%

9.5%

4.0%

5.1%

14.9%

19.9%

FY2011

FY2012

53.0%

66.0%

10.5%

11.8%

8.4%

6.9%

6.9% 17.2%

12.0%

FY2009

FY2010

41.9%

51.9%

12.1%

12.7%

10.5%

8.8%

6.4%

5.5%

23.1%

17.4%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

FY2007

FY2008


Note: not including securitization of real estate of SPC

Source: NRI based on MLIT


25/272


Total return recovered to 7%, the 2005 Q1 level.

Prior to the lobal financial crisis the total return reached to 7% in 2005 1 and hiked till 2006 2.

Total return maintained the rate over 10% until 2007 Q1.

Performance Trend in Japan

13.8

20.0

(%)

3.7

7.3 7.4

5.05.0

10.0

.

Total ReturnIncome Return

‐7.2

0.3

2.3

‐

5.0

0.0

Capital Return

‐11.7‐15.0

‐10.0

M a r

J u n

S e p

D e c

M a r

J u n

S e p

D e c

M a r

J u n

S e p

D e c

M a r

J u n

S e p

D e c

M a r

J u n

S e p

D e c

M a r

J u n

S e p

D e c

M a r

J u n

S e p

D e c

M a r

J u n

S e p

D e c

M a r

J u n

S e p

D e c

M a r

J u n

S e p

D e c

M a r

J u n

S e p

D e c

M a r

J u n

S e p


2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Source: MSCI Real Estate IPD


26/272


Cap rates fell sharply and by 2014 most likely reached the 2007 level.

In the Tok o market an increasin number of real estate deals have ca rates of 3-4%. Some investors believe that ar uin ca rates is futile as one can expect higher rents. Such market players consider timing and level of rent increase more important rather than caprate compression.

8.0%

ap a e ren n apan

6.0%

.

Office Osaka CBD

4.0%

5.0%

Office Tokyo CBD

Retail Tokyo

Residential Tokyo

Logistics Tokyo Multi

3.0%

O c t

‐ 0 3

M a r ‐ 0 4

A u g

‐ 0 4

J a n

‐ 0 5

J u n

‐ 0 5

N o v ‐ 0 5

A p r ‐ 0 6

S e p

‐ 0 6

F e b

‐ 0 7

J u l ‐ 0 7

D e c ‐ 0 7

M a y ‐ 0 8

O c t

‐ 0 8

M a r ‐ 0 9

A u g

‐ 0 9

J a n

‐ 1 0

J u n

‐ 1 0

N o v ‐ 1 0

A p r ‐ 1 1

S e p

‐ 1 1

F e b

‐ 1 2

J u l ‐ 1 2

D e c ‐ 1 2

M a y ‐ 1 3

O c t

‐ 1 3

M a r ‐ 1 4

A u g

‐ 1 4


Office

Tokyo

CBD Office

Osaka

CBD Retail

Tokyo Residential

Tokyo Logis tics

Tokyo

Multi

Source: NRI based on Japan Real Estate Institute

O i f R l E t t I t t M k t i J


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Mega deals of over one billion USD have increased.

Transaction Dec, 2013 Mar, 2014 Aug, 2014 Oct, 2014 Nov, 2014

AssetLand next to theHamamatsucho Station

Otemachi Tower (Ratio of Acquisition: 17% )

Meguro GajoenPacific Century PlaceTokyo （Office floors）

GE’s Residence Portfolio（200 properties）

Property Type Land Office Office・Hotel Office Residence

Area Minato, Hamamatsucho Chiyoda, Otemachi Meguro, Meguro Chiyoda, Marunouchi All parts of the country

Seller Kokusai Kogyo Tokyo Tatemono’s SPC Lone Star Secured Capital Japan（PAG）

GE Real Estate Japan

Buyer Nippon Life InsuranceObayashi

Mizuho Bank Mori Trust GIC Blackstone

Transaction

Amount

800 million USD 1,782 million USD 1,300 million USD 1,700 million USD 2,000 million USD

Area7,205㎡

,(Floor Area of Acquisition)

155,820㎡,

(Floor Area of Acquisition)NA

Source: NRI based on Nikkei Real Estate Market Report and others


O i f R l E t t I t t M k t i J


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oney rom nves ors w eren perspec ves ave cause rea es a e pr ces o r se an

capital to diversify in various market segments.

Pro erties that domestic investors do not favor due to risk concerns have been urchased b forei n and non- rofessional e. . hi h- net-worth) investors with different goals, causing real estate prices to rise in the ex-Tokyo area. The trend is undoubtedly due primarilyto the fact that such investors cannot find any good investment opportunities in Tokyo.

Transaction

Month/Year Jun, 2014 Sep, 2014 Oct, 2014 Nov, 2014 Nov, 2014

Asset Shinbashi Park PlaceNihonbashi TomihisaDaini Building

Parel Royale Shoto Ginza Granvia Bldg 2 Seiko BldgH

Property Type Office Office Residence Retail Office・Retail

Area Minato, ShinbashiChuo, Nihonbashi-Honcho

Shibuya, Shoto Chuo, Ginza Osaka, Kita Shinchi

Buyer high-net-worthhigh-net-worth(Taiwanese)

high-net-worth high-net-worth high-net-worth

TransactionNA NA NA NA NA

u

Gross Floor

Area2,646㎡ 1,310㎡ 2,873㎡ 1,340㎡ 3,342㎡





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,equity heads to the Tokyo neighboring part and ex-Tokyo area.

Man investors are seekin investment o ortunities in Osaka Na o a and other re ions other than Tok o re eatin a similar trend seen between 2004 and 2007. How to build good relations with regional banks is one of the key issues for real estate investors atpresent.

Transaction

Month/Year Jul, 2014 Oct, 2014 Oct, 2014 Oct, 2014 Jan, 2015

AssetRenaissance ResortOkinawa

Shinagawa Seaside(3 properties)

Sumitomo Life SendaiBldg

Beppu Kamenoi HotelMaebashi Daiichi LifeBldgO ama Daiichi Life Bld

Property Type Resort Hotel Office Office Hotel Office

Area Okinawa Shinagawa Miyagi, Sendai Oita Mebashi, Oyama

Seller Ishin Hotel Group Japan Tabacco Sumitomo Life AZ Hotel Chain Daiichi life

Buyer Green Oak Real Estate

Idera Capital

ManagementLone Star

Goldman Sachs Fortress InvestmentGroup

KAISER ASSET

Elliott Management

Transaction

Amount130 million USD

600 million USD(for 3 properties)

NA 40 million USD 8.5 million USD

Gross Floor 40,195㎡ 140,000㎡ 20,411㎡ 19,422㎡ 12,000㎡





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Fierce competition among commercial banks help boost prices.

Banks’ lendin attitude toward the real estate industr is nearl the most lenient since 2000 and almost as lenient as in 2006. Man people in Japan believe that there are too many banks, and competition among lenders is quite fierce. Along with major banks, regionalmid-size banks are trying to reduce spreads and loosen covenants. One big difference from the last peak we saw in 2006, however, isthe non-participation of foreign lenders. One reason why foreign lenders are staying away from the Japanese debt market is the fact

that the CMBS market has been frozen since 2009.

10

15

Financial Institutions’ Lending Attitude DI toward Real Estate Industry

Loose

‐5

0

5

Tight

‐20

‐15

‐10

‐35

‐30

‐25


Source: NRI based on BOJ

M a r

‐

0 0

S e p

‐

0

M a r

‐

0 1

S e p

‐

0

M a r

‐

0 2

S e p

‐

0

M a r

‐

0 3

S e p

‐

0

M a r

‐

0

S e p

‐

0

M a r

‐

0 5

S e p

‐

0

M a r

‐

0 6

S e p

‐

0

M a r

‐

0 7

S e p

‐

0

M a r

‐

0 8

S e p

‐

0

M a r

‐

0 9

S e p

‐

0

M a r

‐

1 0

S e p

‐

1

M a r

‐

1 1

S e p

‐

1

M a r

‐

1 2

S e p

‐

1

M a r

‐

1 3

S e p

‐

1

M a r

‐

1

S e p

‐

1


31/272




4 Office Market






Office Market


32/272

Office Market

Tokyo Area holds 60% of Japan’s office rental market.

.at 64 million ㎡, comprising 60% of the total.

Office Floor Space Shares by Major City

1.7% 1.0%5.5%

3.3% 2.4%

2.1% 1.6%

80%

90%

100%

(1.12million ㎡) (5.87million ㎡)

(3.57million ㎡)(2.54million ㎡)


4.7% 1.0% 1.8%

14.9%

60%

70%



. m on

Osaka Area

17.7

59.9%30%

40%Tokyo Metropolitan Area

67.4

12 major cities

106.73million

0%

10%

20%

(63.94million ㎡)


Source: NRI based on JREI As of Jan.2014The investigation focus on central area of each city.The investigation object which are smaller than 3,000 square meter are excluded

Tokyo Yokohama Saitama Chiba Osaka Kobe Kyoto Nagoya Fukuoka Sapporo Sendai Hiroshima

Office Market


33/272

There are five sub sectors in Tokyo’s Central Business District.

Tok o’s Central Business District CBD has an accumulation of office buildin s and is concentrated in an area of 5km wide.

Itabashi Adachi

Saitama

7.15 million people

Kita

Katsushika

SumidaTaito

Arakawa

Toshima

Bunkyo

Nerima

30 km

Tokyo

13.22 million people

Kanagawa

9.07 million people

Chiba

6.15 milion people

Minato

Edogawa

KotoShibuya

ShinjukuChiyoda

Chuo

Suginami

Meguro

Shinagawa


30 km

Ohta

Office Market


34/272

Vacancy rates in the Tokyo office market have been improving for two consecutive years.

, .

Vacancy rate movement in Tokyo CBD

on y an – anear y -

12.0%

14.0%

12.0%

14.0%

8.0%

10.0% Shinjuku

MinatoChuo

8.0%

10.0%Minato

Shinjuku

4.0%

6.0%

Chiyoda

4.0%

6.0%

Chiyoda

0.0%

2.0%

9 8

9 9

0 0

0 1

0 2

0 3

0 4

0 5

0 6

0 7

0 8

0 9

1 0

1 1

1 2

1 3

1 4

Shibuya

0.0%

2.0%

3 3 3 3 4 4 4 4 5

Shibuya


Source: NRI based on Miki Shoji Co., Ltd. data

1 9

1 9

2 0

2 0

2 0

2 0

2 0

2 0

2 0

2 0

2 0

2 0

2 0

2 0

2 0

2 0

2 0

J a n

‐

A p r ‐

J u

l ‐

O c

t ‐

J a n

‐

A p r ‐

J u

l ‐

O c

t ‐

J a n

‐

Office Market


35/272

Although rent increase is slow, there has been a clear reversal in the rent trend.

’, , .

Rent trends in Tokyo CBD (yen/tsubo per month)

Yen/month, tsubo Yen/month, tsubo

Monthly(Jan. 2013 – Jan. 2015)Yearly(1999 - 2014)

26,000 26,000

20,000

22,000

24,000

20,000

22,000

24,000

14,000

16,000

18,000 ShibuyaMinato

Chuo

Shinjuku 14,000

16,000

18,000 ShibuyaMinato

Chuo

Shinjuku

10,000

12,000

1 9 9 9

2 0 0 0

2 0 0 1

2 0 0 2

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

2 0 0 9

2 0 1 0

2 0 1 1

2 0 1 2

2 0 1 3

2 0 1 4

10,000

12,000

‐ 1 3

‐ 1 3

‐ 1 3

l ‐ 1 3

‐

1 3

‐ 1 3

‐ 1 4

‐ 1 4

‐ 1 4

l ‐ 1 4

‐

1 4

‐ 1 4

‐ 1 5


Source: NRI based on Miki Shoji Co., Ltd. data

Note: One tsubo is 3.3 square meters

J a

M

a

M

a J u S e

N

o J a

M

a

M

a J u S e

N

o J a

Office Market


36/272

The number of Tokyo’s office workers is declining at a fast rate than the published forecast.

4,500

（千人）

Trend and Forecast of Office workers in Tokyo

(1,000 people)

3,818 3,835

3,660

3,461

3,648 3,6433,565

3,498

3,500

4,000

2323 wards

3,243

2,500

3,000

2,020 1,988

1,884

, , 2,035 1,998

1,539 1,533 1,501 1,473

1,500

2,0005区

Central 3 wards

Central 5 wards

(Chiyoda, Chuo, Minato, Shibuya, Shinjuku)

, , 1,415

500

1,000(Chiyoda, Chuo, Minato)


01990 1995 2000 2005 2010 2015 2020 2025

Source: NRI based on Population Census of Japan, Tokyo Metropolitan Government

Office Market


37/272

Despite the dwindle in the number of office workers, new office supply will continue to grow.

# of buildings

Supplied f loor area

1,000 ㎡

Office Space Supply in Tokyo’s 23 districts

183

216

175

60

70

200

250 Office supply areaNumber of building supplied

108 104114 118

119 125 121

154

119 117111 110

12440

50

150

56 55

8392

74

36

72

91

77

65

86 85

58

8896

20

30

50

100

0

10

0

1 9 8 6

1 9 8 7

1 9 8 8

1 9 8 9

1 9 9 0

1 9 9 1

1 9 9 2

1 9 9 3

1 9 9 4

1 9 9 5

1 9 9 6

1 9 9 7

1 9 9 8

1 9 9 9

2 0 0 0

2 0 0 1

2 0 0 2

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

2 0 0 9

2 0 1 0

2 0 1 1

2 0 1 2

2 0 1 3

2 0 1 4

2 0 1 5

2 0 1 6

2 0 1 7

2 0 1 8


Source: NRI based from Mori Building Company’s “Mega Office Building Market Trends Survey (Preliminary figure)” dated October 22, 2014

Office Market


38/272

Cap rate has been dropping for three consecutive years since 2012.

- ’

Tokyo office market cap rate trend

, ,NOI, henceforth.

6.0%

6.5%

4.5%

5.0%

.

ShinjukShinagaShinjukuShinagawa

3.5%

4.0%Minato(Toranomon)Chuo(Nihonbashi)Chiyoda(Marunouchi)

3.0%

O c t

‐ 0 3

A p r ‐ 0 4

O c t

‐ 0 4

A p r ‐ 0 5

O c t

‐ 0 5

A p r ‐ 0 6

O c t

‐ 0 6

A p r ‐ 0 7

O c t

‐ 0 7

A p r ‐ 0 8

O c t

‐ 0 8

A p r ‐ 0 9

O c t

‐ 0 9

A p r ‐ 1 0

O c t

‐ 1 0

A p r ‐ 1 1

O c t

‐ 1 1

A p r ‐ 1 2

O c t

‐ 1 2

A p r ‐ 1 3

O c t

‐ 1 3

A p r ‐ 1 4

O c t

‐ 1 4

Chiyoda(Marunouchi) Chuo(Nihonbashi) Minato(Toranomon)


Source: NRI based on Japan Real Estate Institute’s “Real Estate Investor’s Survey”

Shinagawa Shinjuku Shibuya


39/272

Office Market


40/272

Liquidity is growing as real estate prices rise in ex-Tokyo office market.

’ .

Ex-Tokyo Office Market Cap Rate Trend

8.0%

.

6.0%

7.0%

SendaiSapporo

Fukuoka

5.0%

agoyaYokohamaOsaka

3.0%

.

t ‐ 0 3

r ‐ 0 4

t ‐ 0 4

r ‐ 0 5

t ‐ 0 5

r ‐ 0 6

t ‐ 0 6

r ‐ 0 7

t ‐ 0 7

r ‐ 0 8

t ‐ 0 8

r ‐ 0 9

t ‐ 0 9

r ‐ 1 0

t ‐ 1 0

r ‐ 1 1

t ‐ 1 1

r ‐ 1 2

t ‐ 1 2

r ‐ 1 3

t ‐ 1 3

r ‐ 1 4

t ‐ 1 4


O c

A p

O c

A p

O c

A p

O c

A p

O c

A p

O c

A p

O c

A p

O c

A p

O c

A p

O c

A p

O c

A p

O c

Source: NRI based on Japan Real Estate Institute’s “Real Estate Investor’s Survey”


41/272




4 Office Market






Residential Market


42/272

- ,percentage is trending upwards.

- ,3.34 million in 1988, increased by about 2.6 times to 9.96 million (about 20% of all households) in 2013.

4,716 4,989

5,238

20%20%

25%

5,000

6,000 R

a t i o o f H o

A p

: 1 0 , 0

0 0 )

Public Rental

House

6%

Company

Housing

2%

-

3,7604,097

,

12%

15%

16%

15%

3,000

4,000

u s e

h o l d s L i v i n

r t m

e n t H o u s e

u s e h o l d s

( u n i t

Private Rental

Housing,

Others

9%

1,411 1,578 1,682 1,724

1,783 1,857

334 490 650 750

879 996 5%

10%

1,000

2,000

i n P r i v a t e

R e

( n o n‐ w o o

d ) N u

m b e r o f H

0%0

'88 '93 '98 '03 '08 '13

t a l &

Households Living in Housing

Households Living in Rental Houses

Own House

63%

Private Rental

House,

Apartment

House (non‐

wood)

20%


Source: NRI based on data from “Housing and Land Survey”, Ministry of Internal Affairs and Communications of Japan.

ouse o s v ng n r va e en a par men ouses non‐woo

Ratio of

Households

Living

in

Private

Rental

&

Apartment

Houses

(non

‐wood)

Residential Market


43/272

,to non-public rental apartments is trending upwards.

The number of moving households peaked out in 1994-98 and decreased to about 77% of the peak-time level in 2009-13 .

The number of households moving to non-public rental apartments is also on a decreasing trend, although its ratio to the total numberof moving households is trending upwards.

Housing Choices of Moving Households 1984 - 2013

1,186 1,22139%

45% 46% 44% 45%48%

40%

45%

50%

1,400

1,600

R a t i o o f H o u

U n i t : 1 0 , 0

0 0 )

1,103 ,1,039

939

782

884 868778

698639

25%

30%

35%

800

1,000

, s e

h

o l d s L i v i n g

A p

a r t m e n t H H

o u s e h o

l d s (

427

532 557 502 466 447

5%

10%

15%

20%

200

400

600 i n P r i v a t e

R e n

o u s e s

b e r o f M o v i n

0%0

84‐88 89‐93 94‐98 99‐03 04‐08 09‐13

t a l & N

u

Number of Moving Households in Past 5 Years

Number of Households Moved into Rental Houses


Source: NRI based on data from “Housing and Land Survey”, Ministry of Internal Affairs and Communications of Japan.

Number of Households Moved into Private Rental (Apartment) Houses

Ratio of Households Moved into Private Rental (Apartment) Houses

Residential Market


44/272

- housing stock.

The growth of rental apartments (public and non-public combined) outpaced the growth of overall housing as well as the more modest

Housin Stock b T e 1988-2013

rise of rental housing in general.

As a result, the ratio of rental apartments to total rental houses increased from 60 to 70%.

Housin Growth Rates b T e

54 58

61 60

70

) 130 130

140

39 44

40

50

U n i t : 1 m i l l i o n

119 124

120

9 8 8 = 1 0 0

)

16 18

20 21 22 23

12 14 15 16

10

20

u s

i n g S t o c k (

100

107

103

108

100

110

o w

t h R a t e ( 1

0

'88 '93 '98 '03 '08 '13

H

Number of Houses

90

G

Number of Houses

Number of RentalHouses

Number of Rental & Apartment Houses (non‐wood)


Source: NRI based on data from “Housing and Land Survey”, Ministry of Internal Affairs and Communications of Japan.Number

of

Rental

&

Apartment

Houses

(non

‐wood)

'98 '03 '08 '13

Residential Market


45/272

Construction of new rental housing declined in 2009 but is now on a recovery path.

The number of new constructions decreased in 2014 as a reaction to last minute surge in demand prior to the tax increase.

The ratio of rental house has increased as the number of new rental housing has leveled off while the total number of new constructionhas declined.

-

700

800

i t : 1 , 0

0 0 )

Provincial Region

Kinki Region

Chuubu Region40%

45%

50%

1,600

1,800

2,000

：

1 , 0

0 0

500

600

t i o n b y R e g i o n ( U n e ropo an eg on

25%

30%

35%

1,000

1,200

1,400 R

a t i o o f R e n

i o n S t a r t s

U n i

300

4

l H o u s i n g C o n s t r u c

10%

15%

20%

400

600

800

t a l H o u s e s

e r o

f C o n s t r u c t

0

100 N e w R e n t a

0%

5%

0

200

9 1 9 2 9 3 9 4 9 5 9 6 9 7 9 8 9 9 0 0 0 1 0 2 0 3 0 4 0 5 0 6 0 7 0 8 0 9 1 0 1 1 1 2 1 3 1 4

N u m b

Own House Rental House Company House


9 1

9 2

9 3

9 4

9 5

9 6

9 7

9 8

9 9

0 0

0 1

0 2

0 3

0 4

0 5

0 6

0 7

0 8

0 9

1 0

1 1

1 2

1 3

1 4

House Built for Sale Ratio of Rental House

Source: NRI based on data from “Survey of Construction Work Started”, Ministry of Land, Infrastructure, Transport and Tourism of Japan.

Residential Market


46/272

Vacancy rates are rising in all of Tokyo’s 23 wards.

Vacancy rate in the metropolitan Tokyo has continued to decline for the past decade.

In the recent years, however, Tokyo has seen an upward trend of vacancy rates, especially in the 23 wards.

Affected by the Great East Japan earthquake in 2011, vacancy rates in Sendai has seen a significant shrinkage.

-

16

17

n i t : % )

25%

( U n i t : % )

'98 '03 '08 '13

13

14

c a n c y R a t e ( U

15%

i n g ( n o n

‐ w

o o d )

10

11

12

a l H

o u s i n g V a

All Tokyo areas

23 Tokyo

districts

10%

e o f R e n t a l H o u

8

9

J a n

M a r

M a y

J u l

S e p

N o v

J a n

M a r

M a y

J u l

S e p

N o v

J a n

M a r

M a y

J u l

S e p

N o v

R e n t Tokyo cities

Kanagawa

0%

5%

V a c a n c y R a t


2012

2013

2014

Source: NRI based on data from “Report on Rental Housing Market”, TAS Corp. (Analyzed by TASCorp. Data Supplied by At Home Co., Ltd.).

Source: NRI based on data from Data from “Housing and Land Survey”, Ministry of Internal Affairsand Communications of Japan.

Sapporo Sendai Tokyo23

Wards

Nagoya Osaka Hiroshima Fukuoka

Residential Market


47/272

The rent level of non-public rental housing continues to fall.

- , .rent level downward trend continued in 2013.

Rent in the Private Sector (Annual Average) – Nationwide and Central Tokyo

104.0

106.0

.

Y e a r 2 0 1 0 )

98.0

100.0

.

R e n t I n d e x

( B a s e

92.0

94.0

.

n n u a l A v e r a g e )

86.0

88.0

.

9 1

9 2

9 3

9 4

9 5

9 6

9 7

9 8

9 9

0 0

0 1

0 2

0 3

0 4

0 5

0 6

0 7

0 8

0 9

1 0

1 1

1 2

1 3

1 4

P r i v a t e ( Japan

Tokyo 23 Wards


Source: NRI based on data from “Consumer Price Index”, Ministry of Internal Affairs and Communications of Japan.

Residential Market


48/272

- - ,rent levels remain stable.

- - ,stable although the occupancy rate in Tokyo’s 3 central districts and its 23 districts has been on an uptrend since 2012.

Occupancy Rates of REIT-owned and private fund-owned Properties Monthly Rents of REIT-owned and private fund-owned Properties

98%

100%

4,000

4,500

5,000

n / m

2 )

96%

R a t e ( U n

i t : % )

2,500

3,000

3,500

L e v e l ( U n

i t：

Y

92%

94%

O

c c u p a n c y

Tokyo 3 central districts

Tokyo 23 districts

Nagoya city

Osakacit 1,000

1,500

2,000

o n t h l y R e n t

Tokyo 3 central districts

Tokyo 23 districts

Nagoya city

Osakacit

90%

J a n

M a r

M a y

J u l

S e p

N o v

J a n

M a r

M a y

J u l

S e p

N o v

J a n

M a r

Fukuoka city

0

500

J a n

M a r

M a y

J u l

S e p

N o v

J a n

M a r

M a y

J u l

S e p

N o v

J a n

M a r

Fukuoka city


Source: NRI based on data from “ARES J-REIT Property Database”, Association for Real Estate Securitization of Japan.

2012 2013 2014 2012 2013 2014


49/272

Retail Property Market


50/272

Development of large-scale retail stores has started to recover since 2009.

9005,000Floor

Area

Number

of

projects

New Retail Space Supply vs. Number of Development Projects

638

786

738 731 730 750

654

584620

738705

700

800

3,500

4,000

4,500

N u m

)

4,1784,545 4,369

450

500

400

5002,500

3,000

b e r

o f p r o j e c

A r e a ( 1 0 0 0 m

2,455

3,3353,729

,

1,919

2,081 2,351 2,193

2,860 2,824

200

300

1,000

1,500

, s ( c a s e s )

F l o o r

00

500

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013


Note: The reported numbers for the fiscal years 2002 and 2008 include stores without floor space indication.

Source: NRI based on data from the Ministry of Economy, Trade and Industry’s “Large-scale Retail Chain Site Expansion Report”



51/272

,on the rise.

Overall floor area Floor area per SC

Overall floor area and per-store floor area for shopping centers

45.7 46.4 47.9

11.8 12.1 12.4 12.8

13.2 13.6 14.1 14.2 14.5

14.8 15.0 15.3

14

16

50

60

F l o

n

m on m Old SC Standard New SC Standard n m s ore

30.6 30.4 31.5 33.1

34.6

36.5

38.0

42.1 42.7 . .

8

10

12

30

40

r a

r e a p e r s h l l

f l o o r a

r e a

4

6

10

20

o p p i n g c e

n t e

O v e r

0

2

0

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

r


NB: In the old SC standard, only shopping malls with more than 10 retail tenants were considered.

In the new SC standard, the shopping center must have more than 10 tenants including food stalls, service centers and retail outlets.

On the same note, the shopping center must have more than 1,500 m2 retail space.

Source: NRI based on data from the Council of Shopping Centers’ “SC White Book”



52/272

Declining tendency of shopping center’s sales is mitigating.

(％)

Yearly comparison of existing shopping centers’ sales

‐1.6 ‐1.7

0.3 0.30.0

‐1.5 ‐1.3

.5

‐0.50.1

‐1

0

1

‐3.4

‐2.2‐2.1

‐2.0

‐3

‐2

‐6

‐5

‐

‐6.8

‐8

‐7

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014


Source: NRI based on the Japan Council of Shopping Centers’ “Overall Sales Statistics Report



53/272

Compared to other areas, rent level of Ginza, Omotesando and Shinjuku are still high.

60,000 Ginza

Omotesando

（yen / month / tsubo）

40,000

50,000 Ikebukuro

Shinjuku

Shibuya

Ginza

Omotesando

NB2

Tokyo

Metropolitan

Area

30,000

Yokohama

Shinsaibashi

Oodori (Sapporo)

S n u uShibuya

SakaeIkebukuro

NB1 NB3

NB4

10,000

20,000 Sannomiya (Kobe)

Sendai

Tenjin (Fukuoka)

Provincial

Areas

0

Late 2011 Early 2012 Late 2012 Early 2013 Late 2013 Early 2014

o awaramac yoto

Sakae (Nagoya)

NB1: Rent in Yokohama is shown to have spiked in the early half of 2012, but this can be attributed to the extremely small sample size

-


, , -

NB3: Rent in Ikebukuro is shown to have dived in the early half of 2013, but this can be attributed to a sample bias toward low-rent properties in unfavorable locations

NB4:Rent in Shibuya, Sakae and Ikebukuro are shown to have spiked in the early half of 2014, which can be attributed to a sample bias towards a small number ofproperties with high rent

Source: NRI based on the Japan Real Estate Institute



54/272

. ,approaching the all-time low.

8.0%

Commercial establishment cap rates (expected yield)

5.0%

6.0%

7.0% Suburban, Nagoya

Metropolitan , Metropolitan, Osaka

Suburnban, Tokyo

Suburban, Osaka

3.0%

4.0% Metropolitan , Ginza

Metropolitan , Omotesando

0.0%

1.0%

.

NB:Metropolitan high-class specialty stores:

Length of time after construction -or- large-scale repair/improvement: lessthan 5 years

Tenants: Mainly retailers of high-class brands.Rent s stem: Mainl fixed-term variable rental schemes based on the

revenue. Areas: Along Chuodoori in Ginza’s Chuo district.

Along Omotesando in Omotesando’s Shibuya district.

Suburban shopping centers:Sales floor area: around 20,000m2

Key tenants: Prominent general merchandise stores (GMS)

Copyright（C） Nomura Research Institute, Ltd. All rights reserved. 53Source: NRI based on the Japan Real Estate Institute’s “Real Estate Investor’s Survey”

en sys em: a n y xe - erm, xe -c arge ren a sc emes Areas: 1-hour Shinkansen ride along key stations to Tokyo’s Metropolitan

District

Stores for areas outside Tokyo follow similar locational conditions as above.



55/272

-

locations.

, . . ,quantitative aspects such as choice of items/services and number of shops/facilities within a district.

Intra-district factors are also regarded important (i.e. mobility between shops/facilities). On the other hand, exclusivity of a district is notheavily considered (i.e. presence of shops/facilities exclusive to the location, lack of similar shops/facilities around home/work).

42%

22%

41%

49%

12%

21%

5%

7%

0% 20% 40% 60% 80% 100%

交通アクセスがしやすい

商品やサービスなどの選肢が豊富である

The most heavilyconsidered factor

High accessibility

Abundant choice of items/services

20%

19%

18%

48%

48%

45%

24%

24%

25%

9%

9%

12%

店舗や施設の数が多い

様々な用途の店舗や施設がある

店舗や施設間の回遊がしやすい

Ample shops/facilities

Wide variety of shops/facilities

High mobility between shops/facilities

shops/facilities are

considered important

16%

14%

12%

11%

42%

36%

33%

35%

28%

32%

33%

32%

14%

18%

23%

23%

そのにしかいや

公園などの休憩エリアが十分にある

自宅や就業地に近接している

自宅や就業地に同様の店舗や施設がない

ops ac es exc us ve o e oca on

Bountiful resting spaces

Proximity from home/work

Lack of similar shops/facilities around home/work

Exclusivity of a district isnot heavily considered

8%

7%

6%

30%

26%

24%

31%

34%

33%

31%

33%

37%

様々な年齢や職業の人が来訪している

イベントなどが数多く開催されている

企業が集積している

Presence of visitors from various occupations and age groups

High frequency of events

High density of companies Questionnaire name：Investigation about integrated areaPractitioner ：NRI


とても重要である重要であるやや重要である重要でないn=41,273 Very important Important Slightly important Not important

Period of time：July 2014～

August2014



56/272

Large scale development of commercial buildings will proceed mainly around Tokyo station.

Total store area of commercial buildings in metropolitanTokyo

(1,000m2）

100%350

60%

80%

200

250

300

6%

15%

24%

7%

34%

8%

36%

20%

40%

50

100

150Total area(Future plan)

Total area(Existing)

New store

rate

0%0

h i n j u k u ( W e s t )

S h i b u y a

・ M

a r u n i o u c h i

r a k

u c h o

G i n z a

h i n j u k u ( W e s t )

n b a s h i ・ Y a e s u

・

K y o b a s h i

・ O

m o t e s a n d o

R o p p o n g i

NB)

S

O t e m a c h i

・

Y S

N i h o

A o y a m a


Source：NRI based on the Sangyo-Times ”Commercial Facilities Schedule Guide”, Toyo Keizai Shinposha “National Supermarket Guide 2015”

Total area(Existing) includes department stores and specialty stores. Data as of May 2014Total area(Future plan) is calculated via following formula: Total area(Future plan) = Site area × Floor area rate ×Commercial building rate × Shop floor rateNote that the above-calculation is based on a presupposition that floor area rate, commercial building rate and shop floor rate to be 700%, 20% and 60%, respectively.


57/272




4 Office Market






Logistics Property Market

- ’ ,


58/272

,industry, has continued to decline in recent years.

- ’

Car o uantit b trans ort method FY2012 Automobile car o uantit movement

.

In recent years, the volume of cargo transported via automobile has declined due to the downturn in the quantity of trucks sold forprivate use.

7,000Business Personal

（1 million tons）Coastwise vessels

366,8%

Domestic aviation

1,0%

Railwa s

Unit: 1 million tons

4 000

5,000

,42,1%

2 000

3,000

Motor vehicles

4 366 91%

0

1,000


NB: The chronological continuity of data from prior to 2009 could not be guaranteed due to thechanges made to the in tallying methodology in the middle of 2010.

Source: NRI based on the Ministry of Affairs’ “Transport quantity by transport method” and the Ministry of Land, Infrastructure, Transport and Tourism’s “Automobile Transport Statistics Survey”

'60 '65 '70 '75 '80 '85 '90 '95 '97 '99 '01 '03 '05 '07 '09 '11 '13


,


59/272

appears to be in upward trend based on the number of instances.

,4.0% based on the number of reported instances.

The increased quantity of distribution in warehouses is remarkably high. This increase is propelled by the increase in distributionquantity using small lots that are less than 0.1 tons.

Industry-wide (except warehousing) distribution quantity by lot size

(unit: number of instances)

Warehousing distribution quantity per lot size

(number of instances)

0 500 1,000 1,500 2,000 (thousand

Below 0.1t 0.1～0.5t 0.5～1t 1～5t Above 5t

0 5,000 10,000 15,000 20,000 25,000 (thousand

Below 0.1t 0.1～0.5t 0.5～1t 1～5t Above 5t

46.4%2000

ns ances

64.4%2000

4.5%CAGR7.3%

59.2%2005

69.2%2005

CAGR3.7%

CAGR12.6%

75.3%2010

Copyright（C） Nomura Research Institute, Ltd. All rights reserved. 58Source: NRI based on the Ministry of Land, Infrastructure, Transport and Tourism’s “Logistics Census”

.


- - , ,


60/272

expected to continue growing hereafter.

- - -

（兆円）

Market Size of Business-to-Consumer e-Commerce

.

（trillion yen）

22.5

25.125

30

14.4

16.218.1

20.2

15

20

9.7

11.7 .

10

0

5

2012 2013 2014 2015 2016 2017 2018 2019 2020


NB: Business –to-consumer e-commerce: sale of products and services to consumers in general via the InternetSource: NRI


,


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consolidating their logistics capabilities.

The number of supplied warehouse buildings fell to roughly 23% of the peak level in 1991 (12,000 buildings/year) which has stabilized.

The number of supplied warehouse buildings for the transport industry is dwindling at a more relaxed pace compared to the rest of theindustry (see figure below left), but the floor space per building is on an upward trend (below right).

This explains the increased need for SCM support for generic enterprises and new/large-scale logistics facilities for logistics

（㎡）Entire industry Other than transport Transport industryTransport industry Other than transport Transport industry share

Nationwide number of supplied warehouses

including warehouses for transport and transport industry share Floor space per warehouse building

.

1 500

2,000

20%

25%

50,000

60,000

1,000

15%

30,000

40,000

5005%

10%

10,000

20,000


0

' 8 8

' 8 9

' 9 0

' 9 1

' 9 2

' 9 3

' 9 4

' 9 5

' 9 6

' 9 7

' 9 8

' 9 9

' 0 0

' 0 1

' 0 2

' 0 3

' 0 4

' 0 5

' 0 6

' 0 7

' 0 8

' 0 9

' 1 0

' 1 1

' 1 2

' 1 3

0%0

' 8 8

' 8 9

' 9 0

' 9 1

' 9 2

' 9 3

' 9 4

' 9 5

' 9 6

' 9 7

' 9 8

' 9 9

' 0 0

' 0 1

' 0 2

' 0 3

' 0 4

' 0 5

' 0 6

' 0 7

' 0 8

' 0 9

' 1 0

' 1 1

' 1 2

' 1 3

Source: NRI based on Ministry of Land, Infrastructure, Transport and Tourism’s “Construction Statistics”


, ,


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now back in full swing.

(1 billion yen) Real estate industry Transport industry Others

Order volume for construction of warehouses/logistics facilities by ordering industry

500

300

400

200

0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014


Note: Only contracts worth 5 billion yen above are included

Source: NRI based on Ministry of Land, Infrastructure, Transport and Tourism’s “Construction Order Trends, Statistics and Survey”


V t i T k hi h i h di t d d d


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Vacancy rate in Tokyo area, which was on a rise, has diverted downwards.

Monthly rent offers and vacancy rates of logistics real estate

(yen / month / tsubo) Tokyo area Osaka area

Jul.2008

5,000

Rent offer Jul.2010Jan.20154,000

,

Oct.2012

.

Jul.2010Jan.20153,500

Oct.2012

3,000

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0%


NB: Logistics facilities which have a total lot area or total floor area of 10,000m 2Source: NRI based on data from Ichigo Real Estate Information Service’s “Survey on the Logistics Facilities Rental Market”

Vacancy rates


C t h b f lli i 2012 ith T k hitti ll ti l


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Cap rates have been falling since 2012, with Tokyo hitting all-time low.

Single tenant Multi-tenant

Logistics real estate cap rate (expected yield)

7.0%

7.5%

7.0%

7.5%

6.5%6.5%

5.5%

6.0%

5.5%

6.0%

Tokyo(inland)

Chiba(inland)

Tokyo(inland)

Chiba(inland)

5.0%

c t ‐ 0 5

p r ‐ 0 6

c t ‐ 0 6

p r ‐ 0 7

c t ‐ 0 7

p r ‐ 0 8

c t ‐ 0 8

p r ‐ 0 9

c t ‐ 0 9

p r ‐ 1 0

c t ‐ 1 0

p r ‐ 1 1

c t ‐ 1 1

p r ‐ 1 2

c t ‐ 1 2

p r ‐ 1 3

c t ‐ 1 3

p r ‐ 1 4

c t ‐ 1 4

5.0%

c t ‐ 0 5

r ‐ 0 6

c t ‐ 0 6

r ‐ 0 7

c t ‐ 0 7

r ‐ 0 8

c t ‐ 0 8

r ‐ 0 9

c t ‐ 0 9

r ‐ 1 0

c t ‐ 1 0

r ‐ 1 1

c t ‐ 1 1

r ‐ 1 2

c t ‐ 1 2

r ‐ 1 3

c t ‐�

asian_real_estate_2015_en.pdf

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