Japan’s regional cities record 1% growth in retail rents

Rents in non1F units grew at a faster rate of 2.6%.

According to a Savills report, average 1F asking rents in Japanese regional cities decreased by 6.5% HoH and 1.0% YoY to JPY26,920 per tsubo in 2H/2024, while non1F rents increased slightly by 1.6% HoH and 2.6% YoY to JPY16,560 per tsubo.

In addition to Tokyo, the report noted that the growth of inbound tourism has provided strong tailwinds for many regional retail submarkets, and this trajectory will likely continue, especially as inbound visitors increasingly seek more authentic experiences outside of the major tourism centres in Japan.

“In popular regional inbound tourism hubs, particularly Osaka, Fukuoka, and Sapporo, demand for store openings has grown, and strong rental uplift and falling vacancy were observed in some areas. However, growth trends appear to differ slightly in markets that receive fewer inbound tourists, and such markets may face greater challenges if inbound visitors remain limited,” the report added.