Real Estate/J-REIT Sector: What might be overlooked in today‘s buoyant real estate market in Japan?

研报英文原文证据摘录

Real Estate/J-REIT Sector: What might be overlooked in today‘s buoyant real estate market in Japan?

Global Research

29 July 2026ab

Real Estate/J-REIT Sector Equities

JapanWhat might be overlooked in today's buoyant

real estate market in Japan? Real Estate

Kazufumi Takeuchi

Analyst

kazufumi.takeuchi@ubs.com

Early signs that real estate prices might be peaking +81-3-5208 6269

Interest rates have risen for three and a half years, but commercial and residential Jimmy Qiu

property prices in Japan have either risen or remained elevated. In this report, we analyse Analyst

whether Japan's real estate market can continue to do well, based on implications from jimmy.qiu@ubs.com

recent transactions and market data. Concerns have started to surface, stemming from +852-3712 4827

specific deals and management comments, as detailed later in the report.

Sector call depends on global macro; individual stock picking is more important

Interest rates are one of the several key factors that shape the outlook for the real estate

market. Interest rate increases driven by cost-push inflation are generally negative for

real estate prices. Interest rates are heavily influenced by global macro conditions.

Therefore, stock investor sentiment on the real estate sector is unlikely to turn bullish

unless uncertainty surrounding the Middle East is resolved. However, with the possibility

of a sudden improvement in global macro conditions difficult to rule out, we think a full

bet on the sector downside is also risky. We thus think individual stock selection amid a

neutral sector outlook will be increasingly important. In that sense, we are bullish on

Mitsui Fudosan following its Q1 FY3/26 results, as discussed later, and name it as our

new top sector pick.