TokyoRetail MarketDynamics Q42024
Tokyo
• International anddomestic brandscontinue todrivenewopening demand.
• Anew standalone buildingsetforcompletion alongGinzaChuo-dori in2027;ground floorspaceisalreadypre-leased.
• Capitalvaluescontinue growthataslowerpaceforsecond consecutive quarter.
Retailsalescontinued toincreasey-o-yinOctober, supported inpart bystableconsumer confidence. Meanwhile,salesofluxurygoods in Tokyo's department storesdecreased y-o-y fortwoconsecutive months untilOctoberbutrecovered growthinNovember. Againstthis backdrop, demand fornewstoreopenings remained stronginQ4 2024.Newopenings duringthequarterincluded JilSander inGinza, alongMarronnier-dori, andCarlHansen&Son in Omotesando, alongside Aoyama-dori.
NewsupplyinQ4included theGSproject inGinza.Theten-storey above-ground buildingoffersaGFAof4,000sqmon3-chome along Chuo-dori. TheAppleStore, whichiscurrently inatemporary location, isscheduled toreopen. Futuresupplyconfirmed inthe quarterincludestheNK-G3buildingreconstruction inGinza.The project willofferGFAof2,100sqmalongChuo-dori andisduein2027. Theground floorwillbeleasedtoaninternational jewellery brand.
Rentsaveraged JPY98,714pertsubo,permonth inQ42024, increasing1.2%q-o-q and12.2%y-o-y. Thiswasthe11thconsecutive quarterofincreases,butthepace ofincreaseslowedforthethird consecutive quarter.Capitalvaluesincreasedby1.6%q-o-q and 14.3%y-o-yinQ42024.Transactionsconfirmed inthequarter included LVMHGroup'sacquisitionoftheAbercrombie &FitchGinza storealong Chuo-doriinMayformore thanJPY40billion,according tomarketplayers.
Outlook
According totheDecember Oxford Economics' GrowthOutlook, privateconsumption isexpected toincreaseby1.3%in2025.Risks include trends inconsumer confidence. Intheleasingmarket,rents areexpected tocontinue togrow, albeitataslowerpace, duetoalull indemand. Intheinvestment market,downward pressuremaybe exerted oninvestment yields,reflecting theimpactoftransactions prioritisinglong-term assetvalue.
Fundamentals
Grossrent JPY98,714pertsubop.m.
Rentgrowth Y-o-Y 12.2%
Stage inrental cycle
Rents Rising
Note:FinancialindicatorsarefortheprimeretailmarketsofGinzaandOmotesando, whileretailsalesgrowthfiguresareforTokyoPrefecture.DataisonanNLAbasis.
RetailSales
Retailsalesgrowth
TokyoRetail MarketDynamics Q42024
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Research-Japan naoko.iwanaga@jll.com
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