May 2024
TokyoRetail MarketSummary
Q1 2024
Groundfloorrentalscontinuetorenewrecordhighsinboth GinzaandOmotesando
Economy
Theassessmentoftheconsumerconfidenceindex wasrevisedupwardsto"improving"inJanuary,on thebackofcontinuedrecoveryacrossindices. LuxurygoodsalesatdepartmentstoresinTokyo continuedtoregisterstronggrowth(+32%y-o-yin February2024and+46%comparedtoFebruary 2019),withsalesinpartsupportedbyrecovering foreignvisitorarrivals(+7%comparedtoFebruary 2019).
DemandandSupply
Notablenewopeningsintheprimestreets includedHokaatthecrossingofOmotesandoand Meiji-dori.Balenciagaisscheduledtoopenin GinzaChuo-doriin2Q24
TokyuPlazaHarajuku“Harakado”isduefor completionin2Q24.Locatedatacornerlotofthe Jingumaeintersection,aretailfacilitywithnine storeysabovegroundandGFA20,000sqmwillbe offeredtothemarket.Simultaneously,TokyuPlaza OmotesandoHarajuku,theexistingbuilding acrosstheintersection,willberenamedTokyu PlazaOmotesando'Omokado'tosignifythe connectionbetweenthetwostructures.
RetailSales
Source:METI,JLL,Q12024
Inaddition,theSCJingumae5-Chome CommercialProjectissettocommence constructionin2Q24.Aretailbuildingwithsix storeysabovegroundandaGFAof3,500sqm willbeofferedinthePrimeretailmarketin Omotesandouponcompletionin2Q26.
In1Q24,theDogenzaka2-ChomeSouthDistrict RedevelopmentProjectcommenced constructioninShibuya,amarketadjacentto Omotesando.Theoffice-andhotel-ledmixedusedevelopmentwithatotalGFAof87,100sqm willofferretailspaceonthepodiumfloorsof theofficetower.
©2024 JonesLangLaSalleIP,Inc.Allrightsreserved. 1 | Tokyo Retail Market Summary
Japan Research|
-40.0 -30.0 -20.0 -10.0 0.0 10.0 20.0 30.0 4Q19 4Q20 4Q21 4Q22 4Q23 yearoveryear, in percent
Primeretailareasareseeinginvestmentactivityincreasing
AssetPerformance
AveragerentsinTokyo'sPrimeretailmarket reachedJPY91,545pertsubo,permonthin1Q24, increasing4.0%q-o-qand14.5%y-o-y.Rent growthaccelerated,drivenbyground-floorrents. BothGinzaandOmotesandocontinuedtorenew recordhighs,commandingaunitrentofJPY 315,000andJPY285,000pertsubo,permonth, respectively.
Capitalvaluesalsocontinuedtogrowin1Q24, increasing4.6%q-o-qand15.2%y-o-y.The increasewasattributedtothehealthygrowthin rents,ascapratesremainedstable.
InvestmentVolume
Theretailinvestmentvolumeinthespecialwards ofTokyototalledJPY139.8billionin1Q24, increasing408.3%q-o-qand222.5%y-o-y.Notable transactionsinthequarterincludedanacquisition byadomesticcorporateofA-FlagKotto-dori locatedinthefringesofOmotesandoforJPY5.0 billionandanNOIcaprateof3.4%
Outlook
Accordingtotheeconomicoutlookprovidedby OxfordEconomicsinApril2024,private consumptionfor2024wasunchangedat0.6%. Consumptionisexpectedtorecoverslowlyasreal incomesgraduallyimprove,butisexpectedtobe impactedbyfadingpent-updemand
Intheleasingmarket,rentsareexpectedtogrow overthenext12months,drivenbydemandfrom internationalretailersonthebackofthestrong performanceofluxurygoodscoupledwith attractiveexchangerates.
Intheinvestmentmarket,therearesignsof recoveryinactivityinthePrimeretailmarket, whichcouldplacedownwardpressureoncap rates.
©2024 JonesLangLaSalleIP,Inc.Allrightsreserved. 2 | Tokyo Retail Market Summary
75 80 85 90 95 100 105 110 115 120 125 1Q20 1Q21 1Q22 1Q23 1Q24 1Q20=100 Rental Value Index Capital Value Index Source:JLL,Q12024 Property Clock Source:JLL,Q12024 FinancialIndices
KeyPerformanceIndicators
Occupationalmarket
Source:JLL,Q12024
Note1:RentsrefertoTokyo’sprimeretailmarketsofGinzaand Omotesando
Note2:Propertyclockbasedonrentsforprimeretailspace.
Note3:InvestmentvolumereferstospecialwardsofTokyo’sretaildirect commercialrealestateinvestmentvolume.
©2024 JonesLangLaSalleIP,Inc.Allrightsreserved. 3 | Tokyo Retail Market Summary
Rentspertsubopermonth Enbloc Q-o-Q Y-o-Y Tokyo Primeretail JPY91,545 +4.0% +14.5% Rentspertsubopermonth Groundfloor Q-o-Q Y-o-Y Ginza JPY315,000 +5.0% +16.7% Omotesando JPY285,000 +5.6% +21.3%
Investmentvolume Q-o-Q Y-o-Y Tokyoretail Q12024 JPY139.8 billion +408.3% +222.5% Investmentmarket
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