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Tokyo Residential Leasing Q3/2021

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Downtrend in rents continues

Although rents have weakened, occupancy rates see a slow recovery.

  • Rents in the Tokyo 23 wards (23W) fell by 0.9% quarter-on-quarter (QoQ) and 3.6% year-on-year (YoY) to JPY3,929 per sq m this quarter.
  • Average mid-market rents in the central five wards (C5W) saw a small decline this quarter and are now at JPY4,661 per sq m – a fall of 0.2% QoQ and 3.6% YoY.
  • The C5W premium has inched up to 17.9% – up 0.3 percentage points (ppts) from Q2/2021.
  • In the C5W, average rents for units in the 15-30 sq m size band have again decreased this quarter. However, the 30-45 sq m size band saw a small increase in rents.
  • The average occupancy rate in the 23W rose by 0.2ppts to 95.6%. The C5W saw a similar increment, increasing 0.2ppts to 94.5%.
  • The C5W has seen a population decline, driven by younger families who appear to prefer larger units.

Occupancy rates have slightly improved this quarter, suggesting that future declines may be less marked. While the C5W continues to be the most negatively affected by the pandemic, the mid-term prospects of the submarket are brighter thanks to the multiple ongoing redevelopment projects. At the same time, public discourse regarding post-pandemic life has started to gain some traction.

Savills Research & Consultancy
Map 1

GRAPH 6 | Net Migration Flows into the C5W, 2019 and 2020

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