JAPAN Law and Practice Contributed by: Satoru Hasumoto, Takahiro Sato and Fuyuki Uchitsu, Mori Hamada
Mori Hamada Marunouchi Park Building 2-6-1 Marunouchi Chiyoda-ku Tokyo 100-8222 Japan Tel: +81 3 6212 8330 Fax: +81 3 6212 8230 Email: info@morihamada.com Web: www.morihamada.com
1. General 1.1 Main Sources of Law
these factors may positively affect the real estate mar - ket going forward. The Japanese real estate market has been active of late and is attracting particular attention from abroad due to a sustained rise in property prices and the depreciation of the yen. In 2025, several large-scale transactions involved the sale of retail and data cen - tres to foreign real estate funds, indicating a strong appetite for Japanese assets amid increased inbound tourism and the recent trend of traditional Japanese companies adopting asset-light strategies. Another trend is rising inflation, which is stimulating invest - ments in new asset types, such as data centres and refrigerated warehouses. On 27 June 2025, the Finan - cial Services Agency (FSA) amended part of its Q&As to facilitate REITs’ investment in data centres and refrigerated warehouses and to achieve enhanced diversification within the real estate investment man - agement sector. Overseas investments are also increasing. For exam - ple, in 2024, Sekisui House REIT, Inc acquired two real estate properties in the United States. In contrast, new large-scale development projects have stalled some - what due to rising materials and labour costs. A new type of real estate fund, security token offer - ings, has also been increasing over the past few years and will attract more attention going forward. For more information on market trends, see our Cham- bers article Japan: An Introduction to Real Estate.
The Civil Code provides the general legal framework for real property and real estate transactions, includ - ing ownership, co-ownership, superficies, easement and security interests, as well as sale and purchase and leasing transactions. In addition to the Civil Code, the Law on Unit Owner - ship of Buildings governs unit ownership ( kubun shoyu ken ) and the relationship between the unit owners of a multi-unit building, while the Land Lease and Building Lease Law applies to leases of buildings and lease - hold interests or superficies in land for the purposes of owning a building on a parcel of land. Since this Law was enacted to enhance the protection of the tenant’s interest, some provisions are mandato - ry and cannot be circumvented by the parties to a land lease or building lease. There are also court rulings on land and building leases, which have established legal doctrines that generally restrict the lessor’s rights and protect the tenants. 1.2 Main Market Trends and Deals The Japanese economy is experiencing inflation for the first time in many years. In March 2024, the Bank of Japan exited from the negative interest policies it introduced in February 2016. It further increased its policy rate in July 2024, January 2025 and December 2025. While increases in the policy rate would result in increasing interest payments for real estate funds,
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