Investor appetite is expected to remain strong this year, backed by Japan’s economic recovery from the pandemic and the continued low-interest-rate environment.

Interest rates will likely rise eventually but, after a rapid and aggressive period of tightening, there is relatively little further upward movement to come, according to JLL’s Global Real Estate Perspective. However, Japan is a slightly different situation.

“Any rate increases by the Bank of Japan might not happen in the near term as the current consumer price index (CPI) is controlled and significantly lower than other major economies,” says Naito.

Uncertainty could yet persist but there is reason for optimism, says Stuart Crow, CEO, Capital Markets, Asia Pacific, JLL.

“The market continues to be challenging, with many investors reasoning that the tightening of lending standards will provide further uncertainty for the commercial real estate market,” Crow says. “However, Asia Pacific remains more insulated and we’re confident that liquidity risk is well contained in the region and a resumption of activity is a matter of when, and not if.”