Residential occupancy rates in Tokyo 23W stable at 96.2% in Q3

But occupancy rates in C5W saw a slight dip.

Residential occupancy rates in the Tokyo 23W stayed flat over the quarter at 96.2% in Q3/2024, down 0.7ppts on an annual basis, according to data from a Savills report. 

“Meanwhile, occupancy rates in the C5W saw a slight dip of 0.2ppts QoQ to 95.8%, reflecting a 0.7ppts YoY drop. While this might appear slightly concerning, a vast majority of the properties that have below-average occupancy are high quality assets that were recently operating at close to full capacity,” the report added.

Here’s more from Savills:

Considering the strong wage growth in 2024, many of them appear to be taking the opportunity to boldly increase rents, and this has likely resulted in prolonged downtime. A number of asset managers thus seem to have moved some focus away from maintaining full occupancy to achieving rental growth, which could signal the beginning of a paradigm shift. Nevertheless, occupancy levels are still high overall, and should quickly recover.

Net migration into the Tokyo 23W has continued to hit new highs, which should provide firm demand for residences. The forsale condominium is characterised by limited supply and elevated prices, meaning that a vast majority of these new migrants will likely be looking for rental units. High land and construction costs also suggest that this trend of low supply of for-sale units should continue, consequently boosting the rental market. As such, landlords should be confident of high leasing demand going forward.

Note: In order to illustrate trends in the central Tokyo residential market, Savills has segmented Tokyo’s 23 wards (23W) into seven distinct geographical areas: Central (or “central five wards”), South, West, North (Inner and Outer) and East (Inner and Outer).