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Fate of Japan's land price gains hinges on real demand

Land prices are climbing in downtown Hiroshima as more big stores crop up.

TOKYO -- Much of this year's rise in land values in cities outside the main urban centers of Tokyo, Osaka and Nagoya has been driven by yield-starved investors, raising the risk that the trend will not be sustainable unless real demand keeps pace.

Commercial land prices in Fukuoka Prefecture climbed 1.1% on the year as of July 1, a turnaround from the year-earlier 0.2% decline, government data released Tuesday show. These gains were driven by a hotel construction boom around Hakata Station that will add more than 1,000 rooms by fiscal 2018.

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