, Japan
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Average retail rents rise across Japan in Q1 2024

Kyoto’s average rents exceeded pre-pandemic levels for the first time.

Seven out of ten areas in Japan witnessed an increase in average retail rents, according to CBRE.

The report said that average rents in Kyoto exceeded pre-pandemic levels for the first time, joining Ginza, Shinsaibashi, and Kobe.

Shibuya stood out with the most substantial decline in vacancy rates, dropping by -3.4 percentage points due to new store openings from various sectors like sporting goods and jewelry.

Meanwhile, Kyoto saw the most significant rise in average rents, recording an increase of +14.0%, buoyed by a surge in foreign tourist numbers. 

Retail vacancies were predominantly filled by outdoor and sporting goods brands, fashion labels, and luxury retailers, with strong demand observed particularly from the outdoor/sporting goods sector seeking large units in prime high street locations nationwide. 

ALSO READ: APAC retail rents to rise gradually as travel rebounds: report

Q1 2024 saw a rise in new store openings across nine surveyed high street areas, totaling 3,911 tsubo of floor space, up by 11.4% from the previous quarter.

The outdoor/sporting goods sector drove the highest demand, accounting for 22.6% of new store space, driven by health-conscious trends and increased tourism. Fashion and luxury brands also contributed significantly to new openings, particularly in Tokyo, with noticeable demand for apparel, wristwatches, and eyewear retailers targeting units of approximately 60 tsubo.

Meanwhile, supply-demand dynamics remain tight across the country, with three areas operating with vacancy rates below 1%, potentially slowing down new store openings in the near future despite robust leasing demand expected to drive rent increases. 

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