Larger Tokyo residential units command rising rental premium in Q1

Rents for units in the 45-60sqm segment rose 1.3%.

Tokyo’s rental market remains dominated by compact, single-occupier units, with apartments under 45 sq m accounting for around 70% or more of listings across the 23 wards (23W), according to Savills.

Savills noted that unlike cities such as New York and London, flat-sharing is not a significant segment in Tokyo, supporting a large and stable market for small- to mid-sized units.

In Q1 2026, rents increased across all unit sizes in the central five wards (C5W), with larger apartments continuing to outperform. The 45–60 sq m segment recorded the strongest growth, rising 1.3% quarter-on-quarter, while mid-sized units (30–45 sq m) and smaller units (15–30 sq m) saw more modest increases of 0.4% and 0.3%, respectively.

Savills said the widening rental premium for larger units reflects limited supply and a higher concentration of affluent tenants in central locations, who are generally less sensitive to rental increases.

At the same time, while office attendance is rising, flexible working arrangements remain prevalent, sustaining demand for larger homes that can accommodate home office space and provide greater privacy.

Looking ahead, Savills expects larger units in central Tokyo to continue commanding a premium over smaller apartments, supported by constrained supply and evolving tenant preferences.