Tokyo Retail Rents Stabilize as Foot Traffic Returns to Pre-Pandemic Levels
Summary
CBRE's Q4 2025 report shows Tokyo retail rents have stabilized at 95% of 2019 levels, with premium locations in Shibuya and Shinjuku showing signs of exceeding pre-pandemic rates. Landlords are increasingly flexible on lease terms for quality tenants, creating opportunities for businesses seeking prime locations.
Why It Matters
- Market stabilization provides predictability for long-term business planning
- Flexible lease terms offer opportunities for negotiating favorable conditions
- Prime locations may become more expensive as competition intensifies
What To Do
- Review current lease terms and prepare for upcoming renewal negotiations
- Explore expansion opportunities while landlords remain flexible
- Budget for potential rent increases in premium locations over the next 12-18 months
Tokyo's retail real estate market is showing signs of full recovery, according to the latest analysis from CBRE Japan.
Key Market Indicators
- Average Rent Recovery: 95% of 2019 levels
- Premium Location Premium: Shibuya, Shinjuku now at 102% of 2019
- Vacancy Rates: Declined to 4.2% from 6.8% in 2024
- Lease Term Flexibility: Landlords offering 3-5 year fixed terms
Neighborhood Analysis
| Area | Rent Index (2019=100) | Trend |
|---|---|---|
| Ginza | 98 | Rising |
| Shibuya | 102 | Stable |
| Shinjuku | 101 | Rising |
| Ikebukuro | 92 | Rising |
| Roppongi | 88 | Stable |
Recommendations for Tenants
Businesses seeking retail space should act soon to secure favorable lease terms before the market fully normalizes. Consider locations slightly outside prime areas for better value while foot traffic continues recovering.
Original Source: CBRE Japan
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