Japan Retail MarketView Q4 2023

Vacancies filled amid robust demand; 
high street rents rise in six areas

• In Q4 2023, the vacancy rate declined q-o-q in five of the nine surveyed areas. High street rents rose in six of the 10 surveyed areas, although the only areas in which rents exceeded pre-pandemic levels were Ginza, Shinsaibashi and Kobe, which had already eclipsed this benchmark in previous quarters.
• Robust leasing demand was observed from retailers in the luxury brand, apparel, recycled goods, and capsule toy shop categories. Leasing activity is now being driven not only by luxury goods brands, but by a wide range of retailers benefiting from the post-pandemic economic recovery and a resurgence of inbound tourist demand.
• Driven by positive sales figures, appetite for new store space remain particularly strong from luxury goods brands. However, almost all available units in Tokyo and Osaka were leased this quarter. As luxury goods brands tend to prefer large retail spaces spread across multiple floors in highly visible locations, they are now turning their attention to properties currently under construction.