Commercial real estate investment in Japan spiked a whopping 78 percent in the second quarter from the same period last year, a new report shows, in a sign that the impact of the government's radical reflating policies is gaining traction.
Asian property services firm Jones Lang LaSalle identified the world's third largest economy as one of the most thriving commercial property markets in Asia at the moment, as demand for offices, warehouses, retailers, restaurants and apartment blocks clocked up $10.2 billion of investment for the quarter, a 78 percent jump.
"In Japan, investor confidence has been boosted by improving macro-economic indicators following government stimulatory measures," said Jones Lang LaSalle.
Prime Minister Shinzo Abe's plans to radically overhaul the economy, known as 'Abenomics' involve aggressive monetary policy, fiscal stimulus and structural reform, and have so far worked to dramatically boost economic sentiment in the country.
In particular, the Bank of Japan's decision to bolster its holdings of real estate investment trusts (J-REITs) by 30 billion yen ($301.6 million) to 140 billion yen in 2013, as part of its $1.4 trillion asset purchase program unveiled in April, has provided a strong boost to the commercial real estate market, the report found.
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"This [J-REIT purchases] coupled with increased IPO activity has supported transaction volume growth," said Jones Lang LaSalle.