Tokyo
• Domesticandinternational consumers supportstrong luxurygoods sales.
• Demand forprimeretailspaceremained strong, ledbyinternational anddomestic retailers.
• Rents continue torenew record highsinbothGinzaandOmotesando.
Withstableconsumer confidence andincreasesinemployee wages, therealconsumption trend index wasstable.Meanwhile,Tokyo's department storesluxurygoods salesincreased 26.0%y-o-yinJanJul,andtouristconsumption increased73.5%y-o-y inQ22024. Demand forprimeretailspaceremained strong, ledbyinternational anddomestic retailersinQ32024.Newopenings inthequarter included Chaumetopening atOmotesando Hills.Thereopening of CelineatGinzaSixtook place, withexpansion acrossfloors.
NewsupplyinQ32024included Omotesando. OJProject(tentative name), alow-riseretail-ledbuildingwithtwostoreysaboveground. GinzaSony Parkwascompleted withagrand opening planned for January2025;however, itsusewillfocusonexperience consumption. TheoutlineoftheGinsenOmotesando Projecthasbeen confirmed. A retail-ledbuildingwiththreestoreysaboveground withaGFAof 1,300sqmwillbecompleted onasidestreetinOmotesando in2027.
RentsinTokyo’s primeretailmarketreached JPY97,527pertsubo, permonth inQ32024,increasing 3.0%q-o-q and14.3%y-o-y. Ground-floor rentscontinued torenew record highsinbothGinza andOmotesando Capitalvaluescontinued togrowinQ32024, increasing3.3%q-o-q and16.5%y-o-y. Theincreasereflected growth inrents ascapratesremained stable.Notabletransactionsinthe quarterincluded Kenedix's acquisitionofretail-ledOnden Flatin Omotesando's fringes.
Outlook
Oxford Economics' October 2024outlook hasprivateconsumption in 2024at-0.2%;in2025thefigureisexpected toaccelerate to1.6%. Consumption recovery isexpected toextend asrealwagesare improving. Intheleasingmarket,rentsareexpected togrow, albeitat aslowerpace, reflecting strongdemand fromaffluentinternational brandsagainstalimitedsupplyofprime space.Intheinvestment market,capitalvaluegrowthisexpected toreflect rentgrowth.
Fundamentals
Y-o-Y
Stage inrental cycle Rents Rising
Note:FinancialindicatorsarefortheprimeretailmarketsofGinzaandOmotesando, whileretailsalesgrowthfiguresareforTokyoPrefecture.DataisonanNLAbasis. Research TokyoRetail MarketDynamics Q32024
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