Daiwa Real Estate Unit Aims to Raise Rents to Fight Higher Rates

June 9, 2026 - 04:21

Daiwa Securities Group Inc.'s real estate asset management arm is pushing to raise rents on both office buildings and apartment units. The move is a direct response to rising interest rates, which have made property acquisitions and financing significantly more expensive.

The company is focusing on increasing rental income to offset the higher cost of capital. As central banks continue to tighten monetary policy, borrowing costs for real estate firms have climbed sharply. This has squeezed margins on existing properties and made new investments less attractive without higher returns.

For office spaces, the unit is targeting higher lease rates in prime locations where demand remains relatively stable. In the residential sector, it is adjusting rents on apartment complexes to reflect the new financial reality. The strategy aims to protect profitability without relying on asset sales or taking on excessive debt.

The broader Japanese real estate market has seen a shift as long-low interest rates begin to rise. Investors and property managers are now forced to adapt. Daiwa's approach highlights a growing trend among real estate firms: passing higher financing costs on to tenants through increased rent. Whether the market can absorb these hikes remains to be seen, especially in sectors where vacancy rates are still a concern.