In 2023, Japan’s GDP growth rose to 1.9%, mainly driven by pent-up demand for Japanese goods and services, business investment and government stimulus. Despite inflationary pressures, retail spending remained resilient due to robust job market conditions. While BOJ ended Japan’s negative policy rate in March 2024, any increase in interest rates is likely to be very limited. Outlook is fairly positive, with sustained but moderated growth going forward.  

The residential sector witnessed increased occupancies and stabilized or rising rents, while the new condo market saw record-high prices, indicating strong demand, especially in core city centre districts. The hospitality sector rebounded post-border re-opening, with average rooms rates surpassing pre-pandemic levels, although labour shortages remained a challenge. The retail sector saw stable to higher occupancy and sales, driven by robust tourist consumption and increased luxury spending. High street rents in key shopping districts experienced robust growth, fuelled by competition among retailers.

Amidst global geopolitical and macro uncertainties, Japan continues to offer attractive investment opportunities, with further growth potential in the residential, hospitality, and retail sectors.

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