Luxury goods sales recover growth trend

• Domestic consumption remained stable due to recovering income and sentiment. Luxury goods sales resumed growth in September, followed by two consecutive months of 20% y-o-y growth. Inbound consumption stayed strong amid record foreign visitor arrivals.
• Notable new openings in Q4 included Loewe and Läderach (F&B) on Chuo-dori, and UGG on Matsuya-dori in Ginza. In Omotesando, Diptyque opened alongside Cat Street.

Seiwa Ginza Building completes on Chuo-dori in Ginza

• New supply in Q4 included Seiwa Ginza Building, a two-building redevelopment project that also features Ginza Dai-Ichi Bldg (office building). The retail building offers a GFA of 4,700 sqm across 13 above-ground floors, with Loewe occupying four storeys.
• The outline of Omotesando Grid Tower was made public. The office-led mixed-use development, with 38 above-ground floors, will offer a GFA of 46,000 sqm upon completion in Q1 2026. Retail space will be provided on the ground and basement floors.

Rents and capital values continue growth trend

• Rents in Q4 reached JPY 104,154 per tsubo per month, increasing 1.9% q-o-q and 5.5% y-o-y. Growth continued, albeit at a slower pace, primarily because major brands with strong rent affordability had completed their expansion cycle.
• Capital values in Q4 increased 1.7% q-o-q and 4.2% y-o-y, driven by rent growth amid stable cap rates. Notable transactions in the quarter included domestic real estate corporation Mantomi Asset Management’s acquisition of Ginza gCUBE (price undisclosed).

Outlook: Gradual growth in rents and capital values are expected to continue

• According to economic forecasts by Oxford Economics as of December, private consumption y-o-y growth was revised up to 1.2% in 2025 and 0.7% in 2026. Risks include the impact of continued inflation on consumer sentiment.
• Rent growth is expected to continue, driven by the tight demand-supply balance from independent international brands and near-fully committed future supply. Investment market capital values should increase gradually alongside rent growth while cap rates remain stable.