Daiwa Securities Group’s real estate asset management business is raising rents on office space and apartments to offset growing funding costs driven by higher interest rates, company officials said [1, 2].
Japanese government bond yields have climbed to multiyear highs amid inflation and geopolitical tensions involving the US and Iran, increasing the cost of borrowing for property acquisitions [1, 2]. Daiwa Real Estate Asset Management President Yoshiki Nishigaki said, "With inflationary pressures continuing, we are focused on how to achieve rental growth" [2].
To better negotiate lease agreements, the company expanded its rent negotiation team by adding 10 new staff in April 2026, marking the first major frontline hiring since the unit’s founding in 2004 [2]. Nishigaki added, "The leasing market is extremely strong, making boosting rents a good way to improve profits on properties and then distribute them to investors" [2]. Shota Otani, a company spokesperson, noted, "Market conditions are tight and favourable for landlords" [2].
Daiwa manages office and residential rentals for publicly listed and private real estate investment trusts (REITs) with approximately 1.6 trillion yen in assets under management (AUM) as of March 2026, up from 1.5 trillion yen in September 2024 [2]. The group targets growth to between 1.8 and 2 trillion yen in real estate-related AUM by 2030, building on plans announced in November 2024 [2].
The company uses the consumer price index (CPI) as a benchmark when adjusting rents to inflation levels, with office rents across Japan expected to rise around 5% annually for the next five years, surpassing inflation rates [2].
Daiwa’s latest hiring and rent increases reflect a strategy to improve profitability amid higher financing costs, leveraging strong leasing demand in Tokyo’s tight rental market [2].
