Average rents in the 23W have rebounded close to Q3/2022 levels, and with society having moved to a post-pandemic state, market demand for units in the 23W is expected to keep increasing. 

Given the inflationary environment and robust wage growth particularly amongst young high income earners, central areas are likely to perform well, while the broader 23W remains stable.”

Report summary: 

• Average rents in Tokyo’s 23 wards (23W) recovered 3.3% QoQ and 0.9% YoY to JPY4,027 per sq m, reversing most of the temporary correction in the last quarter.
• Rents in the central five wards (C5W) moved in tandem with the broader market, increasing 3.1% QoQ and 0.7% YoY.
• The C5W premium is at 19.6%, and remains slightly higher than pre-pandemic times.
• Adachi experienced the largest quarterly increment of 4.6%, while Suginami saw the largest correction of 1.6%, although still remaining higher than Q3/2022 levels.
• The 45-60 sq m size band maintains a notable premium,although smaller units saw some recovery this quarter.
• The average occupancy rate in the 23W rose by 0.6ppts QoQ and 0.2ppts YoY to 97.1%, while the C5W increased 0.8ppts to 97.0%.
• Ultra-luxury rental residences should see greater attention given their growing popularity, especially amongst the relatively younger new rich, as well as the very limited stock of such units
• Occupancy rates in the Tokyo 23W increased slightly this quarter to 97.1%, an increment of 0.6ppts QoQ. This equates to a yearly improvement of 0.2ppts, and demonstrates that recovery is progressing in the 23W market in a post-pandemic state. Indeed, occupancy is only slightly shy of the high levels observed before the pandemic.

Click here to download a pdf of the Savills Tokyo Residential Leasing Q1/2023 report