Tokyo retail rents rise for 11th straight quarter in Q4

Rents increased by 12.2% YoY during the quarter.

According to a JLL report, Tokyo retail rents averaged JPY 98,714 per tsubo, per month in Q4 2024, increasing 1.2% q-o-q and 12.2% y-o-y. This was the 11th consecutive quarter of increases, but the pace of increase slowed for the third consecutive quarter.

“Capital values increased by 1.6% q-o-q and 14.3% y-o-y in Q4 2024. Transactions confirmed in the quarter included LVMH Group’s acquisition of the Abercrombie & Fitch Ginza store along Chuo-dori in May for more than JPY 40 billion, according to market players,” the report said.

Here’s more from JLL:

Retail sales continued to increase y-o-y in October, supported in part by stable consumer confidence. Meanwhile, sales of luxury goods in Tokyo’s department stores decreased y-o-y for two consecutive months until October but recovered growth in November.

Against this backdrop, demand for new store openings remained strong in Q4 2024. New openings during the quarter included Jil Sander in Ginza, along Marronnier-dori, and Carl Hansen & Son in Omotesando, alongside Aoyama-dori.

A new standalone building set for completion along Ginza Chuo-dori in 2027; ground floor space is already pre-leased

New supply in Q4 included the GS project in Ginza. The ten-storey above-ground building offers a GFA of 4,000 sqm on 3-chome along Chuo-dori. The Apple Store, which is currently in a temporary location, is scheduled to reopen.

Future supply confirmed in the quarter includes the NK-G3 building reconstruction in Ginza. The project will offer GFA of 2,100 sqm along Chuo-dori and is due in 2027. The ground floor will be leased to an international jewellery brand.

Outlook: Rents are expected to continue rising moderately

According to the December Oxford Economics’ Growth Outlook, private consumption is expected to increase by 1.3% in 2025. Risks include trends in consumer confidence.

In the leasing market, rents are expected to continue to grow, albeit at a slower pace, due to a lull in demand. In the investment market, downward pressure may be exerted on investment yields, reflecting the impact of transactions prioritising long-term asset value.