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- The branded residence segment has long been a niche one in Japan, and stock has been limited.
- Japan is home to a large population of ultra-high-net-worth individuals (UHNWIs), the number and overall wealth of which has increased in recent years. This cohort will likely increase with an influx of wealthy foreign nationals who recognise Japan as a safe haven to store wealth.
- City centres in Japan have become increasingly popular areas for UHNWIs to live in, aided by multiple redevelopments that have transformed the respective areas.
- Many large-scale redevelopment projects in the future will likely be mixed-use and have a greater focus on ultra-luxury, and many luxury hospitality brands have aligned themselves with these projects to develop iconic residences.
- Residential units bearing a brand name have the appearance of a guarantee of high quality in terms of location, building specifications, furnishing, amenities, privacy and services, as well as high re-saleability.
- Multiple five-star hotels developments in recent years across Japan have created further demand for branded residences nationwide, especially in urban areas.
- Ultra-luxury residential units have been selling notably well recently, with Aman Tokyo paving the way for further expansion of the sector.
- In general, ultra-luxury residential units are only around two to three times more expensive than mid-market units on a per tsubo basis, which is thought to be a sustainable level.
Growth of branded residence segment gaining momentum in Japan
The branded residence segment has long been a niche one in Japan, and stock has been extremely limited. That said, changing preferences among domestic UHNWIs and greater interest in Japan as a global tourist destination has boosted the profile of the sector. A slew of branded residence developments located in central urban areas have been receiving significant interest, and the segment appears to be going from strength to strength.
Savills Research & Consultancy