Fukuoka leads regional Japan retail rent growth amidst strong inbound tourism

Osaka, Nagoya and Fukuoka drive divergent trends in the regional Japan retail market.

Regional retail markets across Japan showed mixed performance in 2H 2025, with overall rents broadly stable but strong divergence between cities driven by tourism flows, redevelopment activity and shifting tenant demand, according to Savills.

The consultancy said average ground-floor (1F) asking rents across regional cities edged up 0.2% half-on-half but declined 0.9% year-on-year to JPY26,680 per tsubo. Non-1F rents increased 1.8% half-on-half and 0.7% year-on-year to JPY16,680 per tsubo.

Savills noted that government initiatives aimed at dispersing tourism away from overcrowded hubs are increasingly directing funding toward secondary regional markets, supporting longer-term retail growth prospects outside major gateway cities.

In Osaka’s Shinsaibashi submarket, average 1F asking rents fell sharply by 11.3% half-on-half and 16.2% year-on-year to JPY27,400 per tsubo. However, non-1F rents rose 3.6% half-on-half and 1.2% year-on-year to JPY17,500 per tsubo. While vacancy remains tight along prime streets such as Midosuji, Shinsaibashi and Dotonbori, increased availability in secondary areas weighed on averages.

A key development was Quartz Shinsaibashi on Midosuji, which opened in April 2026 with luxury tenants including Cartier and BVLGARI. The mixed-use scheme, which also includes office and hotel components, is expected to lift footfall in the surrounding area. Savills said leasing demand in Shinsaibashi is expected to remain robust, particularly from luxury and second-hand retail operators competing for limited prime space.

In Nagoya’s Sakae district, 1F asking rents increased 3.4% half-on-half and 6.5% year-on-year to JPY24,500 per tsubo, while non-1F rents rose 2.5% half-on-half and were flat year-on-year. Although vacancy has edged higher overall, prime units remain limited. Redevelopment activity, including renovations at Matsuzakaya Nagoya targeting younger consumers and inbound tourism, is expected to support long-term demand. The postponement of the Meitetsu Nagoya Station redevelopment further reinforces Sakae’s position as the city’s primary retail hub.

Fukuoka’s Tenjin market outperformed, with 1F asking rents surging 37.5% half-on-half and 27.3% year-on-year to JPY34,500 per tsubo. Non-1F rents also rose 3.5% half-on-half and 9.0% year-on-year. Savills attributed the growth to strong inbound tourism, with luxury brands such as IWC opening in the area. Kyushu welcomed a record 5.8 million inbound visitors in 2025, up about 16% from 2024, supporting continued retail expansion in Tenjin.

In Sendai, 1F rents declined 2.8% half-on-half but rose 1.9% year-on-year to JPY27,300 per tsubo, while non-1F rents fell both half-on-half and year-on-year. Vacancy is being gradually absorbed, though redevelopment delays around Sendai Station are expected to keep rents stable in the near term.

Sapporo recorded the steepest declines, with 1F rents falling 22.1% half-on-half and 21.2% year-on-year to JPY19,700 per tsubo. Savills noted that the drop was largely due to absorption of higher-priced units rather than fundamental weakness, with actual rents remaining elevated and vacancy still tight. Ongoing redevelopment around Odori and Sapporo Station, alongside a recovery in inbound tourism to near pre-pandemic levels, is expected to support future retail demand.