Japan Retail MarketView Q2 2025

Average rents set new record highs in four areas
as broad range of sectors including sporting goods push up rents

• Average rents rose q-o-q in four of the 10 surveyed areas in Q2 and remained unchanged in the remaining six. The number of areas with rents above those prior to the pandemic was unchanged from the previous quarter, standing at seven. Rents in four areas (Omotesando/Harajuku, Shibuya, Shinsaibashi, and Kobe) rose to the highest levels since CBRE’s surveys began.
• While the number of areas with prime area vacancy of 0% remained at four (Ginza, Shibuya, Shinsaibashi, and Sakae), vacancies increased in four other areas (Shinjuku, Kyoto, Kobe, and Tenjin). However, these increases in the vacancy rate were the result of building-specific factors, and not indicative of any waning of retailer demand. With the supply-demand balance in prime areas still extremely tight, the quarter saw new store openings and tenant interest in many secondary and peripheral areas.
• Demand was driven by outdoors/sporting goods brands, with new stores in the sector confirmed in Shinjuku, Shibuya, and Kyoto. With one new opening being a flagship store, this pushed up market rates in the area, reflecting brands’ commitment to their storefront strategies.
• Duty-free goods sales figures published by the Japan Department Stores Association have shown y-o-y declines for four consecutive months since February 2025. On high streets, certain luxury brands have begun to recalibrate store launch timings, amid other signs of reexamining their retail strategies. Demand for store space nevertheless remains strong from a wide range of retail sectors, ensuring the supply-demand balance remains tight. Rents are therefore projected to continue rising nationwide.