Japan’s Major Real Estate Firms Expanding Overseas Businesses to Secure Future Growth, Focusing on Europe, U.S., Asia

By Daisuke Ichikawa / Yomiuri Shimbun Correspondent

2:00 JST, February 23, 2026

LONDON — Japan’s major real estate companies are expanding businesses overseas. With the ease of the COVID-19 pandemic and market conditions stabilizing, companies have continued making large-scale investments in the United States, Europe and Asia. As growth potential in Japan is limited, the aim is for sustainable business growth by taking advantage of overseas demand.

Operating profit doubles

Mitsubishi Estate Co. plans to build a large office building complex in central London, the 72 Upper Ground.

Total construction cost is estimated to be around ¥160 billion, marking the company’s largest investment outside Japan to date.

The plan is to build 25-story and 14-story buildings on a site of the same size as the Marunouchi Building in Tokyo’s Marunouchi district.

The site is near the Thames River, with good transportation access. Commercial facilities will be set up in the lower floors.

Construction began in last September and is scheduled to be completed in 2029.

London has seen an increasing number of workers resuming working in-office, which had also seen a decline with the COVID-19 pandemic. Despite this, however, real estate development has remained stagnant. As a result, Mitsubishi hopes demand for attractive and brand-new office buildings will rise.

A senior official at Mitsubishi Estate London Ltd., expressed confidence about the demand, saying, “It has become a challenge for companies here to find good office spaces.”

Mitsubishi Estate has focused on developing real estate in the United States and other regions overseas, setting a goal of doubling its operating profit from overseas businesses from ¥45.8 billion in fiscal 2024 to ¥90 billion by later this decade.

Base equivalent to Tokyo

All five of Japan’s major real estate companies, including Mitsubishi Estate and Mitsui Fudosan Co., recorded their highest ever consolidated net profits as of the end of March 2025. This was driven mainly by the increase in the rents of office buildings and condominium prices in Japan.

However, “the foundation of the real estate business is population,” said an executive of a major real estate company. For this reason, reliance on domestic markets is seen to be approaching its limit as Japan’s population continues to decline. This has led real estate companies to seek new business ventures in other countries.

Mitsui Fudosan, which began overseas development in the 1970s, when Mitsubishi Estate also began, operates various office and housing buildings across the globe.

Since the start of 2025, the company has opened new LaLaport and Mitsui Outlet Park brand commercial facilities in Taiwan.

Going forward, the company plans to expand investments in the southern U.S. and Australia, where economic growth is expected.

There is also notable investment flow into Asian countries, where population growth rates and economic growth rates are high.

Sumitomo Realty & Development Co. announced two new development projects this year in addition to existing three sites, including office buildings, in Mumbai.

The total cost is estimated to be about ¥1 trillion.

“It will be a huge business base equivalent to Tokyo,” a company official said.

Daisuke Fukushima, senior analyst at Nomura Securities Co., said, “With surging materials costs due to the depreciating yen and rising wages, development costs in Japan have been rising.”

He pointed out the importance of operating businesses overseas, saying, “Diversifying business within Japan alone is impossible.”