Larger apartments lead rental growth in Central Tokyo as flex work persists

Units spanning 45–60 sqm saw the strongest rental growth of 2.8% in Q4.

Tokyo’s rental market — long characterised by compact, single-occupier apartments — continued to see steady growth across all unit sizes in Q4/2025, with larger homes leading gains in central areas, according to a report by Savills.

Compact Units Dominate Tokyo’s Rental Landscape

Savills noted that Tokyo’s leasing market is principally composed of smaller units, typically under 45 sq m (13.6 tsubo), which can account for 70% or more of rental listings across the Tokyo 23 wards (23W).

Unlike major Western global cities such as New York City and London, shared housing does not form a meaningful segment of Tokyo’s rental market. As a result, there is a large and stable tenant base for small- to mid-sized apartments, particularly among single professionals and young households.

All Size Bands Record Growth in C5W

In the Central Five Wards (C5W), average rents across all three size bands increased in Q4/2025.

The strongest quarterly growth was recorded in the 45–60 sq m segment, where rents rose by 2.8% quarter-on-quarter (QoQ). This was followed by the 30–45 sq m segment, which saw a 2.0% QoQ increase. Meanwhile, rents for smaller 15–30 sq m units grew by 0.8% QoQ.

While larger units continue to command a premium over smaller apartments, Savills observed that the rental gap between the 30–45 sq m and 15–30 sq m segments narrowed during the quarter.

Flexible Work Supports Larger Homes

The consultancy attributed the outperformance of larger units in part to the continued prevalence of flexible working arrangements. Households seeking additional space for home office setups have shown a preference for larger apartments, supporting rental growth in the 45–60 sq m category.

At the same time, central locations remain attractive to skilled professionals, helping to sustain demand across all size segments.

Outlook: Broad-Based Growth Expected to Continue

Looking ahead, Savills expects the market to maintain steady rental growth, underpinned by Tokyo’s strong demographic fundamentals.

Although larger units are likely to retain a rental premium, increased office attendance and stronger urban activity are expected to support renewed demand for smaller apartments. This dynamic is likely to drive rental growth and further tighten market conditions across all size bands in Tokyo’s 23W residential leasing market.