Two retail projects to watch out for in Tokyo by 2025

These will have a combined GFA of over 13,000sqm. 

The Ginza 6-chome Project in Tokyo is an entire redevelopment of three buildings on a corner lot of Ginza Chuo-dori and Miyuki-dori crossing, fronting Ginza Six across from Chuo-dori. JLL revealed in a report that this will offer a retail-led building with 13 storeys above ground and a GFA of 8,900 sqm upon completion in 2025.

Also located adjacent to Ginza Six but across from Miyuki-dori, Seiwa Ginza Building, a redevelopment of a couple buildings formerly occupied by a bank and a retail store, will offer a retail-led building with 13 storeys above ground and a GFA of 4,700 sqm upon completion in 2025.

Here’s more from JLL:

Rents averaged JPY 77,570 per tsubo, per month, at end-1Q23, increasing 3.1% q-o-q and 9.2% y-o-y. Rent growth was mostly in line with the previous quarter. Growth accelerated strongly in Omotesando but slowed down in Ginza.

Capital values increased by 3.1% q-o-q and 10.4% y-o-y in 1Q23. Growth accelerated for the seventh consecutive quarter, driven by rent growth as cap rates remained stable. Transactions in the quarter included Sumitomo Mitsui Trust Panasonic Finance’s acquisition of Tokyu Plaza Ginza (co-ownership portion) for a confidential price. 

Outlook: Rents and capital values continue to grow

According to Oxford Economics as of March 2023, private consumption was revised downwards to grow by 0.6% in 2023. Private consumption is expected to pick up, supported by pent-up demand and some support from the return of visitor arrivals. The risks include the impact of inflation on disposable income.

On the back of healthy sales supported by domestic consumption and with the expected return of foreign visitor arrivals supporting the figures, demand from retailers is expected to remain robust and underpin rent growth. In the investment market, capital values are expected to rise, reflecting rent growth, while cap rates are expected to remain stable.

Note: Tokyo Retail refers to Tokyo's prime retail markets of Ginza and Omotesando.