- Following numerous redevelopment projects, such as The Minato Mirai 21 Project, Yokohama has reinvented itself since its post-war slump, becoming a genuine alternative to Tokyo.
- Investment volumes into the capital have slowly been decreasing as valuations and opportunities become less favourable. Consequently, some of these flows have been directed to peripheral markets such as Yokohama, which has seen steady increases since 2017.
- As well as the amenities available and its accessibility to Tokyo, the lower cost of living found in Yokohama makes it a popular residential hub, and this looks set to continue.
- With a strength in R&D, the office market in Yokohama is an attractive proposition for businesses. Meanwhile, as the pandemic continues to change working culture, the emergence of satellite offices for example could be a boon for the city.
- Both the retail and hospitality sectors in Yokohama have suffered the same fate as the rest of Japan. Yet the types of projects in progress could be well-positioned to benefit in future.
- The positive demographic outlook should continue to drive Yokohama’s growth over the longer term, despite the challenges faced by the country as a whole.
- Much of Yokohama’s future success depends on a sustained economic recovery in Japan. Regardless, solid demand fundamentals should underpin the market’s resilience for the time being.
An old fishing village takes centre stage once more
Thanks in part to the success of its many redevelopment projects, Yokohama has once again established itself as a major economic hub. Moreover, the onset of COVID-19 could see its popularity rise further owing to its favourable work-life environment. Meanwhile, the relative youthfulness of the city should help ensure that real estate fundamentals remain firm in the years to come, despite Japan’s demographic challenges.
Savills Research & Consultancy