Growth in office investment returns slowed last year as gains in property prices eased, according to a survey released Tuesday.
Total real estate returns, including capital gains and rental income, reached 14.7 percent last year, compared with 13.1 percent in 2006 and 4.1 percent in 2005, the MTB-IKOMA Real Estate Index shows.
The gauge is produced by Mitsubishi UFJ Trust and Banking Corp. and Ikoma Data Service System, a subsidiary of CB Richard Ellis Group Inc.
Japan's real estate market has cooled this year as the economy has shown signs of slowing and property financing has dried up after the collapse of the subprime-mortgage industry.
The slowdown in office investment return increases was mainly due to weaker growth in property prices as rents remained "stable," according to the survey.
Among 13 cities evaluated, Osaka, Nagoya and Kyoto posted falling returns in 2007, while growth in nine other cities slowed.
The data, compiled from 1970 and based on more than 20,000 office leasing contracts in 81 zones, is one of the oldest measures of Japan's real estate returns.