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Japan’s economy passed over the business peak around the fall of 2018, entering a clear recession due to the consumption tax rate hike in the October 2019 and exacerbated by the impact of the spread of COVID-19 since February 2020. However, with May 2020 as the bottom, Japan’s economy is now headed toward recovery.

Amid the impacts of the spread of COVID-19, the for-sale/transaction market for real estate in Japan has already peaked. However, the balance of power between sellers and buyers in transactions has not shifted notably as of present, and the functions of a sound real estate transaction market have been maintained.

Looking at Japan’s real estate rental market, with June 2020 as the bottom, the market conditions of hotels and retail properties are heading toward recovery after an abrupt setback due to countermeasures against the spread of COVID-19.

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Colliers International, in its latest report titled “New Directions In Asia Pacific Logistics-Increasingly Varied Sector Requires Multiple Approaches” highlighted the positive outlook that lies ahead for Asia Pacific’s logistics market.

Across Asia Pacific, demand for logistics space has been supported by a long-run shift from physical to online retailing. COVID-19 has driven up e-commerce volumes sharply, while expansion in the cold chain sector and new infrastructure developments should boost demand further. Most investors and developers already see logistics warehouses as a core asset class.

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Knight Frank, in its latest report titled “Singapore Residential Q3 2020 Transaction Volume Rebounded in Q3 Due to Pent-up Demand” highlighted the positive outlook that lies ahead for Singapore’s residential market. Some of the key perspectives include:

• Prices of non-landed private residential properties (excluding ECs) defied recessionary fears, holding flat at 148.7 in Q3 2020** after rising by 0.4% in the second quarter of the year. Transaction volumes of non-landed residential properties (excluding ECs) more than doubled from the previous quarter, recording 5,895 units in Q3 2020*.
• Pent-up demand from buyers who deferred their purchases coupled with low interest-rates drove the pick-up in sales momentum from both needs-based buyers and those who feared that prices might increase in the near-term.
• The resale market also rebounded in Q3 on the heels of the new sale market. A total of 2,480 units were transacted in the secondary market, more than three times the 758 resale units sold last quarter*. More resale transactions were completed as in-person viewings resumed in Phase 2 and owners grew more confident in allowing viewings with falling COVID-19 cases.

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While office rents continued to drop in the downbeat market, tenants seized the opportunity for better relocation options, resulting in high activity in the leasing market during the month. However, landlords further softened their approach and adopted a more realistic stance in negotiating leasing terms to secure tenants, so the majority of tenants tended to renew their leases. As a result, new take-up of Grade-A office space was at an exceptional low level during the month, particularly in the CBD area.

Amid the challenging economic environment, cost-competitiveness remains a pressing consideration for tenants. Going into 2021, we therefore expect to see a continuing decentralisation trend. We also foresee rising demand for co-working space, as more companies, especially small and medium-sized enterprises (SMEs), which have been heavily impacted by the coronavirus-induced recession to actively explore flexible leasing options.

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