"A very cautious and conservative recovery," provides the basis for hope in the future of the real estate market in this diminutive country, said moderator Shuji Tomikawa, managing director of Mitsui Fudosan. That slow recovery has helped the office market whittle away at the double-digit vacancies of the late 1990s, with cities such as Tokyo today boasting 2% open space.

Office is recovering nicely, but new opportunities will lie elsewhere as well, and Fumio Inada, general manager of investments for Tokyo Tatemono, told investors to start looking toward industrial and what he termed operational assets--hotels and seniors housing specifically. While direct investment will still factor in trades, he stated, properties gained through M&As will factor more widely than they have traditionally in Japan, as will the sale of non-core asset disposition by restructuring user corporations.

A prime example of that is the (US) $730-million sale of 31 properties being mounted by grocer Daiei. In the midst of a country wide retail consolidation, the grocer is shedding a mix of retail and warehousing facilities, Inada explained.

J-REITs, of course, which have been making their mark on the Japanese investment scene for years, continue to build, stated Janne Takemitsu Kobayashi, executive director of UBS Securities. He pinned the overall Japanese real estate investment market at $300 billion. Some 20% of that is owned by J-REITS with an equal amount owned by private funds. In fact, he pointed out, the market for both vehicles has grown 70% since 2003, "fueled by growing institutional demand for real estate investment."