Watch out for these two large ultra-luxury residential projects in Tokyo
One is a 1,000-unit estate expected to be completed by 2025.
Savills revealed in a report that there are two ultra-luxury residential projects of significant size upcoming in Tokyo’s Mita area. The first major and highly anticipated development is Mita Garden Hills in 2025, a joint-development with more than 1,000 units by Mitsui Fudosan and Mitsubishi Estate, with the penthouse unit reportedly on sale for JPY5.5 billion.
“Although primarily a for-sale project, the size of the project could mean that some premium units will be for-rent, and could help spark more interest in mixed for-sale and for-rent developments,” the report said.
Here’s more from Savills:
Based on market rumours, this project is likely to be successful and provide further momentum, especially for its neighbouring project, the Mita Oyamacho redevelopment, which is a large mixed-use development with around 1,450 residential units scheduled for completion in 2027.
While the project is still in its early stages and prices have yet to be disclosed, given its prime location and the prestige surrounding the development, premium units will likely be classified as ultra-luxury.
Furthermore, its mixed-use nature and proximity to office space suggest that some units could also be for-rent. The success of these projects in Mita will pave the way for more ultra-luxury developments in a wider area, on top of cementing Mita as a luxury residential location.
In addition, Torch Tower, part of the Tokyo Station Tokiwabashi Project by Mitsubishi Estate, will feature ultra-luxury rental residences on its upper floors. Scheduled for completion by 2027, some rental units in the complex are reported to have monthly rents of around JPY5.0 million. Torch Tower will primarily be an office building, but will also feature a hotel and event facilities on its higher floors.
Ultra-luxury residences have also seen some shifts in design and location. For instance, the Torch Tower development differs from many other ultra-luxury residences, as it is located in business districts traditionally designated for commercial use, as opposed to a dedicated complex in a high-end residential neighbourhood.
Considering the recent large office supply in conjunction with lifestyle shifts due to the pandemic, replacing office floors with other uses such as ultra-luxury residences has become a viable option. This is especially the case because the rental level of luxury residential has risen significantly to levels on par with prime office or retail. A majority of large developments are mixed-use, which allows for the well-being of both residents and tenants, and has been strengthened further by the proliferation of ESG-centred designs.
Going forward, developments of a similar nature – ultra-luxury residences integrated into commercial complexes, should gain greater traction given the success of existing ones, and the relatively low supply present in the market. Indeed, the pandemic has changed the landscape of office and residence in central locations.
In fact, an office building larger than 100,000 sq m close to the New York Stock Exchange in Manhattan is being converted into a residential building, showing that there is a present for such large-scale renovation projects, and other locations might follow suit. In central Tokyo, Naka-dori in Marunouchi may welcome more residential units in the future.
Indeed, these ultra-luxury residences also make economic sense. The monthly rental levels for such units are expected to be upwards of JPY50,000 per tsubo, which is on par or even higher than prime offices in the Marunouchi area. In fact, the sales price per tsubo of JPY20+ million is higher than strata office floors. Developers of large-scale projects are likely looking to maximise their return and diversify their risk with residential space.