Tokyo’s ultra-luxury residential market is historically considered undersupplied, despite the city’s status as one of the largest gateway cities in the world. Indeed, until quite recently there were probably fewer than ten units fitting our ultra-luxury definition, namely those with a sale price exceeding JPY1 billion. Over the past few years, however, there have been signs that the tide is turning.

In 2017, it was rumoured that a penthouse of Park Mansion Hinokicho Koen was sold for JPY5.5 billion, an unheard of price in Japan, causing a stir in the market. On a per-tsubo basis, though the Hinokicho condo’s price of JPY31 million stands out, a handful of units in other buildings exceeding JPY20 million per tsubo have actually been sold in recent years. At present, the number of ultra-luxury units probably sits in the range of 20 to 30, a figure that will more than double over the next few years. Rents in the luxury residential market are growing at a rate of approximately 5 to 10% upon rent renewal.

As Tokyo continues to go through a large development phase and solidifies its status as a global tourist destination, high-quality residential properties in prime locations may enjoy increasing popularity. Over the next few years, Mori Building’s Toranomon Residential Tower is expected to feature ultra-luxury residential units, which could possibly include an over-JPY10 billion unit, depending on floor layout. Tokyo World Gate and development in Azabudai are likely to supply in this sector.