Tokyo market sees growth overall, with rents and net migration maintaining a steady upward trajectory

• Average rents in the Tokyo 23 wards (23W) witnessed a moderate uptick, increasing by 0.8% quarter-on-quarter (QoQ) and 3.5% year-on-year (YoY) to JPY4,071 per sq m.
• Rents in the central five wards (C5W) also experienced notable growth, increasing 0.7% QoQ and 4.0% YoY to JPY4,920 per sq m.
• The C5W rental premium over the 23W average is 20.1% and is likely to continue steadily increasing.
• Shibuya saw the most significant quarterly increase of 3.6% QoQ, whereas Minato witnessed the largest correction of 1.7% QoQ. Overall, the market appears to be on a steady upward trend over a longer-term timeframe.
• The average rental gap between the largest 45-60 sq m size band in the C5W continues to widen compared to its smaller 15-45 sq m counterparts.
• Average occupancy rates in the 23W increased by 0.3 percentage points (ppts) QoQ to 97.1%, while the C5W increased 0.6ppts QoQ to 97.0%.
• In Greater Tokyo, record-high condominium prices sit against a backdrop of a shrinking supply, a situation that will likely expedite a shift towards the leasing market among those who are priced out.