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On the back of the currency devaluation and strong corporate sector, Japan’s macro economy witnessed a healthy recovery in the first half of 2015 after a year long slump following the consumption tax (VAT) hike back in 2014. Uncertainty intensified, however, due to the Greek debt crisis and stock price plunge in China in early July which could lead to an unwinding of the current favourable currency exchange rate.
The real estate investment market remained very active in the first half of 2015 causing further cap rate compression in major cities in Japan. The volatility of the capital market increased significantly amid the Greek debt crisis and China stock market turmoil. The J-REIT index plunged as much as 16% from the previous peak in January 2015 and it could implicate the change in tide of the investment market which had been dominated by J-REITs.
Source : Deutsche Asset & Wealth Management
