Japan Retail MarketView Q3 2023

Tokyo：Ginza high street vacancy rate for Q3 2023 fell by 3.2 pp q-o-q to 3.5%, as number of vacant spaces were filled while there were limited additional vacancy. High street rents stood at JPY 260,600 per tsubo per month, up 1.2% q-o-q and 1.0% above Q4 2019, immediately prior to the onset of the pandemic. Given the current tight supply and demand situation, Ginza high street rents are expected to continue to rise and are forecasted to be 2.8% above the current level in one year’s time.

Osaka：Shinsaibashi high street vacancy rate in Q3 2023 fell 0.6 pp q-o-q to 2.8%.  While number of vacant spaces were filled, there were no additional vacancy during the quarter. With availability of street-level stores becoming tighter, some landlords are planning to take advantage of the expiration of their existing tenant's contract and replace them with a retailer with higher sales performance. High street rents stood at JPY 204,000 per tsubo per month as of quarter’s end, representing an increase of 5.7% q-o-q and 3.0% higher than the level in the quarter immediately prior to the onset of the pandemic.

Nagoya：Sakae high street vacancy rate in Q3 2023 recorded fourth consecutive quarter of 0.0%.  Availability remained extremely low, resulting in very few leasing transactions. High street rents were unchanged for a fourth consecutive quarter, at JPY 71,000 per tsubo per month. Although demand is high and space is limited, retailers in the area remain conservative regarding their sales and cost assumptions, resulting in a lack of upward momentum to raise market rents.