Tokyo apartment rents continue to rise in Q4, says Savills

City’s central five wards record rising premium over rest of the market

Mount Fuji looms behind the Tokyo skyline. Sakarin Sawasdinaka/Shutterstock

Apartment rents in Tokyo are on the steady move upwards, according to the latest Savills’ Residential Leasing Briefing for Q4 2018.

The Japanese capital features “solid fundamentals”, with all of the city’s submarkets experiencing some measure of growth within the quarter.

But it was the central 5 wards (C5W) showing the biggest growth in premium, hitting a record of 19.1 percent over average rents in Tokyo’s 23 wards — the third consecutive year of peaks.

“Average rents are moving steadily upwards while C5W rents continue to stride ahead, widening their premium over the average as convenient locations prove the most popular,” said Savills Japan’s head of research and consultancy Tetsuya Kaneko.

Asking rents in C5W stood at JPY4,558 (USD41.51) per square metre or a year-on-year growth of 4 percent (0.7 percent over the quarter).

In comparison, average mid-market asking rents in Tokyo’s 23 wards (23W) stood at JPY3,823 per square metre, an increase of 1 percent quarter-on-quarter and 4 percent year-on-year.

Apartments that had been completed within the last four to five years saw strong appreciation rates in rental prices, approximating those of more recently completed units.

Co-living is on the rise among younger property seekers, although “interest may be held back” as a result of Tokyo’s “vast existing stock of compact living spaces and its reliable, well-connected public transit network”, the report stated.