March 19, 2019 / 7:50 AM / 2 months ago

Japan's 2018 commercial land prices rise at fastest pace in 11 years

TOKYO, March 19 (Reuters) - Japanese commercial land prices climbed at their fastest pace in 11 years in 2018, a government survey showed on Tuesday, led by strong demand for office space and a boom in tourism.

Prices for land across the country’s main centres rose 2.8 percent on average last year, according to the Ministry of Land, Infrastructure, Transport and Tourism.

A hotel construction boom continues as Japan aims to bring in 40 million foreign tourists in 2020, when Tokyo hosts the Summer Olympics. Last year the number of tourists hit a record 31 million people, according to the Japan National Tourism Organization.

National average commercial land price growth was the fastest since 2007, when prices rose 3.8 percent.

Prices rose the most in the popular ski resort of Niseko on the northern island of Hokkaido, with a 58.8 percent increase. The second-biggest spike was in a part of Osaka in western Japan, which rose 44.4 percent.

Osaka, long Japan’s “second city,” is winning the race against Tokyo to draw foreign tourists. Inbound tourism to the city surged five-fold between 2012 and 2017, as it lured low-cost carriers and promoted itself as a base to visit World Heritage sites in nearby Kyoto and Nara.

The average residential land price rose 0.6 percent last year, according to the ministry’s data. The ministry surveyed 26,000 spots nationwide.

Reporting by Junko Fujita; Editing by David Dolan and Sam Holmes

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