A shifting office market is expected to create opportunities for occupiers to negotiate favourable new deals, adopt new strategies and consider relocation in Japan later this year, Colliers International says.
Any severe price declines in the Japanese property market stemming from the coronavirus should be limited to smaller, regional hotels, according to Colliers International.
Data from the firm has evaluated the potential impact of coronavirus on markets in the Asia Pacific, all of which are expected to rebound in the second half of the year based on the assumption the outbreak peaks in the early part of 2020.
The report notes that while COVID-19 has reduced risk appetite in Japan and may lead to a temporary fall in new investment, Tokyo offices still offered good value with high yields compared to zero-yielding bonds, with low stock of modern logistics warehouses expected to outweigh high near-term supply, ensuring firm rents.
Colliers’ Executive Director of Research in Asia, Andrew Haskins. Source: Colliers International
Colliers International believes severe price declines should be limited to smaller, regional hotels, which were facing oversupply even before the hit to tourist travel from COVID-19.
"Tokyo’s landlords continue to benefit from limited supply and low vacancy rates, while in Osaka, leasing activity ought to slow until supply reappears in 2022," said Colliers’ Executive Director of Research in Asia, Andrew Haskins.
"Considering slowing rental activity, we recommend occupiers renew leases as soon as possible and explore flex-and-core strategies to reduce dependence on commuting in line with government guidance."
Click here to view the full report.
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