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- Tokyo’s city centre has become an increasingly popular area for ultra-high-net-worth individuals (UHNWIs) to live in, aided by the multiple redevelopments that have transformed the city.
- The prices of ultra-luxury residential units in Tokyo have risen but have stayed affordable when compared to other gateway cities, suggesting that they are correctly priced at current levels.
- The leasing of ultra-luxury residences has grown in popularity, especially among relatively younger Japanese business owners, and wealthy foreign residents, due to their flexibility.
- Japan is home to a large number of UHNWIs concentrated in Tokyo. This will likely increase with an influx of foreign nationals who recognize Japan as a safe haven to store wealth.
- Ultra-luxury residential units are only around two to three more times expensive than mid-market units on a per tsubo basis, which is thought to be a sustainable level.
- Wealth is spread relatively evenly in Japan when compared to many other developed economies, creating a stable societal base for greater ultra-luxury residential demand.
- Many large-scale developments in the future will likely be mixed-use and have a greater focus on ultra-luxury residential leasing due to the comparatively high rents.
Ultra-luxury leasing in Tokyo growing in popularity
Tokyo’s ultra-luxury residential market has grown considerably over the past half-decade on the back of multiple large-scale developments that have reshaped the heart of the city, Tokyo’s large number of UHNWIs, and a shift in preferences toward living in prime central locations. Within ultra-luxury residences, leasing has grown to become an increasingly attractive option for many relatively young and newly wealthy people due to the flexibility it provides.
Savills Research & Consultancy