International and domestic brands continue to drive new opening demand

• Retail sales continued to increase y-o-y in October, supported in part by stable consumer confidence. Meanwhile, sales of luxury goods in Tokyo’s department stores decreased y-o-y for two consecutive months until October but recovered growth in November.
• Against this backdrop, demand for new store openings remained strong in Q4 2024. New openings during the quarter included Jil Sander in Ginza, along Marronnier-dori, and Carl Hansen & Son in Omotesando, alongside Aoyama-dori.

A new standalone building set for completion along Ginza Chuo-dori in 2027; ground floor space is already pre-leased

• New supply in Q4 included the GS project in Ginza. The ten-storey above-ground building offers a GFA of 4,000 sqm on 3-chome along Chuo-dori. The Apple Store, which is currently in a temporary location, is scheduled to reopen.
• Future supply confirmed in the quarter includes the NK-G3 building reconstruction in Ginza. The project will offer GFA of 2,100 sqm along Chuo-dori and is due in 2027. The ground floor will be leased to an international jewellery brand.

Capital values continue growth at a slower pace for second consecutive quarter

• Rents averaged JPY 98,714 per tsubo, per month in Q4 2024, increasing 1.2% q-o-q and 12.2% y-o-y. This was the 11th consecutive quarter of increases, but the pace of increase slowed for the third consecutive quarter.
• Capital values increased by 1.6% q-o-q and 14.3% y-o-y in Q4 2024. Transactions confirmed in the quarter included LVMH Group’s acquisition of the Abercrombie & Fitch Ginza store along Chuo-dori in May for more than JPY 40 billion, according to market players.

Outlook: Rents are expected to continue rising moderately

• According to the December Oxford Economics’ Growth Outlook, private consumption is expected to increase by 1.3% in 2025. Risks include trends in consumer confidence.
• In the leasing market, rents are expected to continue to grow, albeit at a slower pace, due to a lull in demand. In the investment market, downward pressure may be exerted on investment yields, reflecting the impact of transactions prioritising long-term asset value.