Among the bright spots has been Japan’s office sector, where transaction activity has gained momentum. One notable deal in the first quarter was the acquisition of Osaka’s Kitahama Nexu building for 24.85 billion yen ($180 million) by Singaporean sovereign wealth fund GIC.

Office investment volumes in Japan rose more than 110% year-on-year to reach $4.5 billion in the first quarter as investors make the most of the sector’s resilience and robust demand. Offices were also the top destination for investment, making up half of total investment volumes, JLL data show.

Meanwhile, activity outside the office sector has cooled, although recent transactions point toward improving sentiment. “Logistics and multifamily assets in Japan remain highly sought-after by offshore investors seeking exposure to the market,” says Naito.

In April, private equity giant Blackstone sold a six-warehouse portfolio in Japan to GIC for $800 million. More recently, U.S. developer Hines acquired five multifamily properties in Tokyo and Kyoto as part of its strategy to scale up to $1 billion of asset value in five years.