A recent report from Savills Tokyo announces that “Mid-market asking rents in Tokyo’s 23 wards have returned to positive growth after a dip in late 2016. Northern and eastern areas have seen notable increases, and occupancy remains strong. It appears that high condo prices may be leading more people to rent.” 

The key findings from the report are:

• Average mid-market asking rents in the 23-ward area (23W) stood at JPY3,667 per sq m, up 1.2% quarteron-quarter (QoQ) and 0.9% year-onyear (YoY).
• Rents in the central five wards (C5W) increased 1.4% QoQ and 1.7% YoY to stand at JPY4,259 per sq m.
• Tokyo’s Outer East area once again registered the largest YoY growth at 3.5%. The Inner East and Inner North areas are also performing well at 2.3% and 2.7% YoY growth respectively.
• Average rents in the C5W area remain at a 16.2% premium over the 23W average. Southern wards saw a modest decrease in premium, while the Inner North, Inner East, and Outer East areas all saw notable increases.
• Institutional quality assets posted average occupancy of 96.9% in Q1/2017, up 0.7 percentage points (ppts) over the previous quarter and still comfortably above 95%.
• The Bank of Japan (BOJ) and Financial Services Agency (FSA) are actively monitoring apartment-related loans. Total credit to the real estate sector has surpassed JPY85 trillion, a historical high, though the pace of growth began to moderate in late 2016. Credit conditions remain attractive for institutional investors.  

Click here to download the full report