Japan Retail MarketView Q1 2026

Average rents set new record highs in five areas;

fashion sector drives demand

• In Q1 2026, average rents set new all-time highs in five of the 10 surveyed areas (Ginza, Omotesando/Harajuku, Shibuya, Shinsaibashi, and Kyoto). While rents also rose in Shinjuku, three areas (Kobe, Tenjin, and Umeda) saw rents remain unchanged, while Sakae saw rents decline.

• The vacancy rate in prime areas remained at 0.0% in Ginza and Shibuya, while Omotesando/Harajuku and Shinjuku saw decreases from the previous quarter. Although vacancy in the three Kansai areas remained unchanged, they rose in Sakae (where it had been at 0.0% until the previous quarter) and Tenjin.

• Retailer appetite for storefront space remains generally high and is being seen from a diverse range of sectors, with situations where multiple retailers compete for a single available unit becoming increasingly common. New store openings and relocations by retailers with robust existing store sales drove average rents higher in Q1 2026. Demand was driven by the fashion sector, where several new storefront lease contracts for large units were signed this quarter.

• Average rents are expected to continue to follow an upward trend, backed by the tight supply-demand balance. In prime areas, upward pressure on rents is likely to persist, centered on relocations and new store openings by retailers with robust existing store sales. Retailer demand also remains strong for units in secondary areas, which are often smaller in size and have relatively lower total rental costs, ensuring rents should continue to rise.