- In 1H/2022, average 1F rents in Tokyo have again seen upticks. The market has witnessed gradual improvements over the past half-year, although subprime locations are generally still lagging.
- A similar situation has been observed in regional markets, with prime locations faring well.
- Transaction volumes in the first half of 2022 were at a similar level as those in 2021, with some notable deals having been observed.
- Lifestyle changes induced by the pandemic such as the proliferation of e-commerce and some migration to suburban areas are likely to influence the location of demand and the function of retail spaces going forward.
- Newly completed and upcoming large-scale developments tend to be mixed-use, and have ESG features, for diversified revenue streams and elevated footfall.
- While the resumption of visa-free travel will benefit the retail sector, recovery may be moderate overall, and uncertainties hovering over the global economy may lower discretionary spending.
Market to see gradual improvement
The retail sector continues to experience a gradual recovery, although many subprime locations still lag. Lifestyle changes induced by the pandemic will likely influence the function and location of retail space going forward. While the resumption of visa-free travel will further improve the sector, benefits may be moderate due to uncertainties in the global economy.
Savills Research & Consultancy