Key players in the real estate industryThe real estate industry is an important pillar of the Japanese economy. It was Japan’s second largest industry in 2020, generating a gross domestic product of about 65.9 trillion yen. The real estate market comprises various fields such as development and sales, brokerage, leasing, and property management. More than 368 thousand companies were engaging in the real estate industry in 2021, which generated a sales revenue of 48.6 trillion yen. In Japan, companies operating in real estate sales and brokerage or property management for condominiums are regulated and supervised by the Ministry of Land, Infrastructure, and Tourism (MLIT).
Key players in the Japanese real estate industry are large corporations that offer a wide range of services from development to property management through numerous subsidiaries under their umbrella. Mitsui Fudosan, Mitsubishi Estate, and Sumitomo Realty & Development are Japan’s largest real estate corporations in terms of total assets, with the former two being among the largest public real estate companies globally.
Digitalization in the real estate industryIn recent years, Japanese real estate companies, which are considered as lagging behind other industries in terms of digital transformation (DX), have increasingly adopted digital technologies to improve their services. The property technology (PropTech) market reached a size of 611 billion yen in 2020 and was projected to expand significantly over the coming years. The increase was expected to be driven primarily by the business-to-consumer (B2C) segment. Digitalization in the real estate industry received a further push during the coronavirus (COVID-19) pandemic, as consumers showed a growing interest in contactless online services, such as virtual room tours.
An important step towards digitalization was taken with an amendment to the law that came into force in May 2022 and enabled digital documents in the real estate industry. In addition, the government is considering the introduction of a real estate ID, which would facilitate access to information about real estate. The introduction of a real estate ID could not only increase transparency in the real estate industry, thus promoting digital transformation, but also facilitate collaboration with other industries.