• Newopening demand remainsstableintheprime retailarea.
Fundamentals
• GinzaNovo undergoes auseconversion, withaportion oftheF&Bareascheduledtobe converted andadded totheexisting nightclubarea.
• Rentalgrowth trends continue onbothground floorsandupperfloorsonthebackofextremely limited supply.
Tokyo luxurysalesgrew20%y-o-yinJan-Feb.Inbound consumption increased 3%y-o-yinQ1,asforeign visitorarrivalsedged up1%y-o-y. This wasdespite amarkedslowdown invisitorsfromChinawhichdecreased 55%y-o-y. Notablenewopenings inQ1included Jinsopening aglobal flagshipstoreonChuo-doriinGinza.In Omotesando, Milletopened aflagshipstoreontheHarajukusideofCatStreet.
Nonewsupplyentered theprime retailmarketinTokyo inQ1.TheGinzaNovo (formerly TokyuPlazaGinza),completed itsconversion inMarch, whichincluded converting aportion oftheF&Bareaintoanightclub.
Rents reached JPY109,179per tsubopermonth inQ1,up4.8%q-o-q and9.6%y-o-yfrom 1.9%inthepriorquarter. Growthcontinued despite moderating luxurydemand, driven bycasualapparelandvisibility-seekingretailersamidseverely limitedsupply. CapitalvaluesinQ1increased by5.0%q-o-q and8.1%y-o-y, driven byrentgrowthamidstablecaprates.Nonotableprime retailtransactionswere confirmed during the quarter.
Outlook
According toeconomic forecastsbyOxfordEconomics asofMarch,privateconsumption growth wasrevised down to0.5%y-o-yin2026,given thesituationintheMiddleEast.Signsofweakening consumer sentiment implyfurtherdownside risk.Whiledemand frommajor luxurybrand groupshasmoderated, strongdemand forhigh-visibilitylocationsshouldpersistamidconstrained supply. Rentsareexpected togrow ata slowerpace. Capitalvaluesshouldrisegraduallywithrents,whilecapratesremainstable.
Note:FinancialindicatorsarefortheprimeretailmarketsonChuo-doriinGinzaarea andonOmotesandobetweenAoyama-doriandMeiji-dori inOmotesandoarea.Data isonanNLAbasis.Luxurygoodssales
Source:JapanDepartmentStoresAssociation
Note:Luxurygoodsrefertoart,jewellery,andprecious metals
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