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As reported in the semi-annual survey by the Japan Real Estate Institute (JREI) and BAC Urban Projects, rental growth in Tokyo’s prime retail submarkets on the whole was impressive during 2H/2019. Average 1F rents increased by 4.9% half-year-on-half-year (HoH) and 14.9% year-on-year (YoY). As for Non-1F rents, growth in this sector has yet again exceeded its typically more volatile 1F peer, rising 8.8% HoH and 15.9% YoY. As such, for the first time, non-1F rents in all submarkets sit above JPY30,000 per tsubo per month. At the submarket level, 1F rents in Ginza remain streets ahead of rivalling districts, whilst the spread between average non-1F rents remains tight.

One of the greatest uncertainties we face today surrounds the trade-off between minimizing the human cost from the coronavirus and restarting the economy.  Much of the world economy remains shut down, and consequently, economic distress arising from the coronavirus crisis has been pervasive.  And rightfully, governments around the world have announced an unprecedented program of stimulus, support, rescue and regulatory relief in response to the economic impact of the effort to combat the pandemic.
 

The COVID-19 pandemic continues to depress office rents during the month, with rents in Central and Admiralty dropping 18.6% and 22.2% YoY, respectively, extending the decline to 11 consecutive months. With current rents adjusted significantly downwards, cost-conscious occupiers started to seek bargain deals in the down market, triggering more leasing activity than in the previous month. In Island East, however, as office vacancies remained at a low level (Quarry Bay: 0.5%, North Point: 5.1%), rents in the area remained stable.
 

The effects of the continuing COVID-19 pandemic were of course the main factor impacting the Asia Pacific property market in the first quarter. Signs of the outbreak weighing on sentiment were seen in markets across the region, however robust government stimulus packages and policies are cushioning impacts, and opportunities are emerging across many sectors in the region. In Hong Kong the virus exerted further downward pressure after a prolonged period of political and economic uncertainty, keeping major players on the sidelines. Similarly in Singapore uncertainty has begun to limit activity in both the residential and commercial sectors. Private equity inflows into India’s real estate market have slowed to a trickle and investments in dynamic emerging markets like Myanmar have been put on hold.