MarketView | JAPAN RETAIL | Q2 2022
MARKETVIEW | JAPAN RETAIL | Q2 2022
Ginza high-street vacancy rates fell by 1.4pp to 3.1% q-o-q, the largest fall since the COVID-19 spread + 2.8% Retail Sales*
y-o-y Apr. to Jun.
+ 26.1% Apr. to Jun. y-o-y
Department store sales**
ｰ 2.0pts m-o-m Consumer confidence index*** Jun. 2022
ｰ 1.4pts q-o-q
±0.0%
q-o-q
Ginza High Street Rent **** Q2
Ginza High Street Vacancy Rate **** Q2
Source: *Ministry of Economy, Trade and Industry **Japan Department Stores Association ***Japanese Cabinet Office ****CBRE
━ Nagoya : Nagoya’s Sakae high street vacancy rate for Q2 2022 fell 0.8pp from the previous quarter to 0.0%. However, there are several properties which are being offered, some of which are relatively large size. Sakae high streets rents fell by 0.7% q-o-q to JPY 70,000 per tsubo. Although there is a demand for shop openings from a wide range of retail categories, the retailers are seeking rents below the current market levels.
9% 6%
JPY/tsubo
500,000
心斎橋
京都
神戸
栄
天神
Tenjin
渋谷
Sakae
新宿
Kobe
表参道・原宿
Kyoto
銀座
Shibuya
0%
Shinsaibashi
3% Shinjuku
confirmed at several properties in the Shinsaibashi-suji shopping district, and new vacancies were limited. High street rents in the Shinsaibashi district remained unchanged from the previous quarter at JPY 142,000. As in the previous quarter, the Midosuji high street continued to attract demands from luxury brands for shop openings. However, the demand was not strong enough to drive up rents.
12%
Omotesando Harajuku
━ Osaka : Osaka’s Shinsaibashi high street vacancy rate fell by 1.4 pp q-o-q to 13.1% in Q2 2022. Tenants were
15%
Ginza
━ Tokyo : The high street vacancy rate in Tokyo’s Ginza area fell by 1.4 pp q-o-q to 3.1% in Q2 2022. Relatively large vacancies were filled during the quarter, and new vacancies were limited. Ginza high street rents remained unchanged for the third straight quarter at JPY 241,500 per tsubo per month. In addition to demand from luxury brand operators which do not have a presence in the Ginza area, the period saw other retailers looking to relocate from existing stores within the district.
Figure 1: High street vacancy (upper graph) & prime rent/high street rents (lower graph) in Q2 2022
400,000 300,000 200,000 100,000 0
Prime Rent
High Street Rent
Source: CBRE, Q2 2022
1
CBRE RESEARCH
© 2022 CBRE, INC.
MarketView | JAPAN RETAIL | Q2 2022
Figure 3: Retail Sales & Department Store Sales
Economy
20 y-o-y %
Q2 Department store sales increased double-digit y-o-y
y-o-y %
200
15
150
10
100
partly as a result of recovery in consumer confidence due to increased opportunities to go out.
5
50
High-end spending was brisk, particularly among high net-worth customers, and sales of summer
0
0
-5
-50
-10
-100
National department store sales for Q2 2022 increased 26.1% y-o-y. This was partly due to low base last year, which was under business restrictions due to the declaration of a state of emergency, and
clothing and UV-care products were strong in June. On the other hand, the consumer confidence index for June 2022 worsened for the first time in three months to 32.1, down 2.0 points m-o-m. The decline in the index was due to a series of price hikes for daily necessities and the fact that many consumers expected prices to continue to rise.
-15
-150 4 5 6 7 8 9 1011 12 1 2 3 4 5 6 7 8 9 1011 12 1 2 3 4 5 6 7 8 9 1011 12 1 2 3 4 5 6 2019
2020
Department Store Sales (RHS)
2021
2022
Retail Sales
Source: Datastream, Japan Department Stores Association, METI, CBRE, Q2 2022.
Figure 2: Consumer Confidence Index
Figure 4: Number of Inbound Tourists in Japan
45
35 million 30
31.2
40
28.7
25 24
20
35
31.9
19.7 15 30
13.4
10 5
25
8.6 6.2
8.4
10.4 4.1
0 2010
20
2011
2012
2013 2014 2015 2016
1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6
2019
Source: Datastream, CAO, CBRE, Q2 2022.
2
CBRE RESEARCH
2020
2021
2022
2017
0.2
0.1
0.5
2018 2019 2020 2021 Apr to Apr to Jun Jun 2021 2022
Source: Japan National Tourism Organization (JNTO), CBRE, Q2 2022.
© 2022 CBRE, INC.
MarketView | JAPAN RETAIL | Q2 2022
High street rents forecast to rise by 0.6% in Q4 2022 The high street vacancy rate for Q2 2022 fell by 1.4 pp q-o-q to 3.1%. Tenants were found for properties with relatively large floor space, and new vacancies were limited. Ginza high street rents remained unchanged for the third straight quarter at JPY 241,500. CBRE forecasts rents to remain at this level until Q3 2022, before a projected rise of 0.6% in Q4 2022. While available high street properties are attracting more interest than they did in the previous quarter, negotiations are prolonged, which is delaying the confirmation of new tenants. As a result, CBRE has pushed back its original projection of the timing of when the Ginza high street rents would start rising, from Q3 2022 to Q4 2022. We expect rents to rise by 3.1% over the next two years, at which point the rent will have recovered to 3.5% below the level recorded in Q4 2019, just before the advent of the pandemic. Although a newly-developed property in the high street area of Chuo-dori attracted interest from multiple luxury brands in Q2 2022, the fact that it is being offered as a multi-level unit is limiting interest, with most retailers considering tenders for just the ground floor or for the bottom two floors only. Another available property on Chuo-dori has been leased by a recycled goods store to function as its flagship location. While the contracted rent was slightly below the asking rent, it was at the going market rate. Elsewhere, another recycled goods store confirmed that it will relocate to new premises in the high street area of Miyuki-dori. At the same time, larger properties or those asking rates above market averages are continuing to struggle to attract interest. While the property owners are asking for the same rents as what their previous tenants had paid prior to the pandemic, retailers are looking to pay significantly less. Multiple overseas brands with no street-level presence in the Ginza area were seen to be searching for opportunities to open new stores this quarter. In addition to luxury goods brands, these include jewelry, outdoor and sporting goods, and fashion brands. Some have expressed an interest in securing a location before inbound tourist numbers pick up once again. Several retailers are also looking for new premises as a result of being asked to leave their current locations which are planning a redevelopment. Several existing tenants in secondary areas who signed their contracts prior to the pandemic are now looking to return the upper-level parts of their units. Others, who were unable to reach satisfactory terms with their landlords during contract renewal negotiations, are beginning to look elsewhere. Some available properties in secondary areas are failing to attract interest as a result of their inefficient use of floor space. While others have attracted interest from multiple retailers, negotiations are progressing slowly.
3
CBRE RESEARCH
Figure 5: High street vacancy rate & high street rent in Ginza (JPY/tsubo)
6%
245,000
5%
244,000 243,000
4%
242,000 3% 241,000 2%
240,000
1%
239,000
0%
238,000 Q2 2021 High Street Rent Vacancy Rate
Q3 2021
Q4 2021
Q1 2022
Q2 2022
RateRent HighVacancy Street
Source: CBRE, Q2 2022.
Figure 6: Ginza high street rent (JPY/tsubo)
270,000
▶ Forecast
265,000 260,000 255,000 250,000 245,000 240,000 235,000 230,000
Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024
Tokyo: Ginza
Source: CBRE, Q2 2022.
© 2022 CBRE, INC.
MarketView | JAPAN RETAIL | Q2 2022
Tokyo: Omotesando/Harajuku
Tokyo: Shinjuku
Some luxury brands prepared to consider paying rents above market rates
Larger properties attract retailer demand on the condition of reducing floor area
The high street vacancy rate for Q2 2022 fell by 1.0 pp q-o-q to 6.2%, with a relatively large property confirming a new tenant.
The high street vacancy rate for Q2 2022 rose by 2.2 pp q-o-q to 10.2%, with new vacancy in relatively large spaces.
During the quarter, a potentially available unit on the Omotesando high street saw interest from multiple retailers, including luxury brands, with some retailers expressing an interest in paying above market rates. Luxury brand demand is concentrated on Omotesando. Other retailers are considering establishing permanent stores in the area following the success of their pop-up operations. As a result, high street rents for Omotesando and Harajuku rose by 3.4% q-o-q to JPY 183,800 this quarter. Several new store openings were confirmed in properties on the Meiji-dori high street, including an overseas brand opening its first Japanese store. At the same time, however, several available properties have now stood vacant for some time. Areas heavily populated by domestic brands, in particular, are struggling to attract retailer demand.
Shinjuku high street rents remained unchanged for the second straight quarter at JPY 170,000. One available property in the high street area of Shinjuku-dori confirmed a high-end wristwatch brand as its new tenant, while retailer interest was observed for another available property on the same street. Demand is centered on Shinjuku-dori from a wide variety of retailers in industries such as luxury goods and outdoor and sporting goods, with interest seen from multiple retailers in even relatively large properties. In several cases, however, retailers are negotiating with landlords to reduce floor space or restrict levels in an effort to lower the total rent burden. Some current high street tenants, while desiring to extend their contracts, have requested rents to be lowered as a result of flagging sales.
An available property in a secondary area drew interest from an overseas e-commerce brand this quarter, while another secondary area property confirmed as its new tenant a retailer relocating from Ginza, wishing to switch its advertising focus to a younger demographic. Figure 7: High street vacancy rate & high street rent in Omotesando/Harajuku (JPY/tsubo)
184,000
8%
182,000
7%
180,000
6%
178,000
5%
176,000
4%
174,000
3%
172,000
2%
170,000
1%
168,000 166,000 Q2 2021
Q3 2021
Street Rent Vacancy High Rate
Source: CBRE, Q2 2022.
4
Figure 8: High street vacancy rate & high street rent in Shinjuku (JPY/tsubo)
9%
0%
CBRE RESEARCH
Q4 2021
Vacancy Rate High Street Rent
Q1 2022
Q2 2022
While an available property in a secondary area has attracted interest from fashion and food retailers, its above-market asking rent and a rather narrow configuration have prevented it from securing a tenant.
184,000
12%
182,000
10%
180,000 178,000
8%
176,000
6%
174,000 172,000
4%
170,000
2%
168,000 166,000
0% Q2 2021 Vacancy RateRent High Street
Q3 2021
Q4 2021
Q1 2022
Q2 2022
HighVacancy StreetRate Rent
Source: CBRE, Q2 2022.
© 2022 CBRE, INC.
MarketView | JAPAN RETAIL | Q2 2022
Tokyo: Shibuya
Figure 10: Number of new store openings by location
50
Luxury brand secures its first Shibuya area store The high street vacancy rate for Q2 2022 fell by 3.2 pp q-o-q to 9.1%, with tenants secures in several available properties of approximately 50 tsubo. Shibuya high street rents remained unchanged for the third straight quarter at JPY 126,800 in Q2 2022. An available property on the Koen-dori high street secured a luxury brand as its new tenant, with the store representing the brand’s first street-level presence in the Shibuya area. The store is intended to target Gen Z consumers and other younger demographics. Several other luxury goods and fashion brand retailers are also searching for opportunities to open new stores in the Shibuya area which can be used as marketing tools to attract younger consumers. An available unit in the high street area of Center-gai, however, is proving hard to lease out due to its narrow configuration. A large available property of over 200 tsubo in the secondary area of Jinnan attracted the interest of an overseas retailer this quarter. Although another long-term vacancy in a secondary area has garnered retailer attention, there remains a significant gap between the asking rent and what any potential tenant is willing to pay. As a result, some time is likely to be required before a contract is signed.
30 20 10 0
Q1
134,000
60
12%
132,000
50
10%
130,000
40
8%
128,000
30
6%
126,000
20
4%
124,000
10
2%
122,000
0
0%
120,000 Q3 2021
Street Rent Vacancy High Rate
Source: CBRE, Q2 2022.
CBRE RESEARCH
Q4 2021
Vacancy Rate High Street Rent
Q1 2022
Q2
Q3
2021 2022 Omotesando
2021 2022 Harajuku
2021 2022 Shinjuku
2021 2022 Shibuya
Q1 2022
Q2 2022
Q4
Source: CBRE Research, company press releases and media reports CBRE, Q2 2022.
14%
Q2 2021
2021 2022 Ginza
Figure 11: Number of new store openings by sector*
Figure 9: High street vacancy rate & high street rent in Shibuya (JPY/tsubo)
5
40
Q2 2022
Q2 2021 Fashion Drug Store
Q3 2021 Luxury Furniture&Goods
Q4 2021 F&B Showroom
Outdoors&Sports Reuse
Health&Beauty Other
*The data covers five areas, including Ginza, Omotesando, Harajuku, Shinjuku, and Shibuya Source: CBRE Research, company press releases and media reports CBRE, Q2 2022.
© 2022 CBRE, INC.
MarketView | JAPAN RETAIL | Q2 2022
Figure 12: Key Store Openings in Tokyo Q2 2022
Tenant
Area
Street Name
Size* (approx tsubo)
GINZA
Chuo-dori
50
Ikedaya Building
JIMMY CHOO
OMOTESANDO/HARAJUKU
Omotesando
N/A
Omotesando Chiyoda Building
BREITLING
OMOTESANDO/HARAJUKU
Omotesando
35
Juchheim Harajuku Building
TAG Heuer
OMOTESANDO/HARAJUKU
Omotesando
20
Omotesando Hills
On
OMOTESANDO/HARAJUKU
Cat street
90
Harajuku 250
Alpen
SHINJUKU
Shinjuku-dori
3,720
tutuanna
SHIBUYA
Basketball street
60
Center 244
Crazy Raccoon
SHIBUYA
N/A
N/A
Frame Jinnan-zaka
AKRIS
Building Name
Yunika Building
*Information in the above table are limited to those available on press releases, media reports, and other public domain. CBRE estimates are not included. Source: CBRE, company press releases and media reports, Q2 2022.
Figure 13: Upcoming Retail Developments in Tokyo (GFA of 1,000 tsubo or more)
Name (Tentative) Minami Aoyama 3 Chome Project TOKYU Kabukicho Tower (Tentative) Jingumae 6-chome Redevelopment (Tentative) Shibuya-ku Dogenzaka 2 Chome Development Plan Seiho Building Development Plan SHIBUYA SCRAMBLE SQUARE (Second term)
Area
GFA (approx tsubo)
OMOTESANDO/HARAJUKU
4,500
SHINJUKU
26,500
OMOTESANDO/HARAJUKU
Developer
Open
Mitsubishi Estate
Feb. 2023
Tokyu Corporation, Tokyu Recreation
Apr. 2023
6,000
Tokyu Land Corporation
Aug. 2023
SHIBUYA
12,700
Pan Pacific International Holdings Corporation
Sep. 2023
OMOTESANDO/HARAJUKU
5,300
Seiho Building, Urban Renaissance Agency
Feb. 2024
SHIBUYA
29,000
Tokyu Corporation
Mar. 2028
Note: Floor area may contain non-retail spaces. Source: CBRE, company press releases and media report, Q2 2022.
6
CBRE RESEARCH
© 2022 CBRE, INC.
MarketView | JAPAN RETAIL | Q2 2022
Kansai: Shinsaibashi Luxury demand on Mido-suji; pop-up store demand in shopping district The high street vacancy rate for Q2 2022 fell by 1.4 pp q-o-q to 13.1%. Tenants were confirmed at several properties in the Shinsaibashi-suji shopping district, and new vacancies were limited. Shinsaibashi high street rents remained unchanged from the previous quarter at JPY 142,000. On the Mido-suji high street, a property, whose tenant is likely to leave, has attracted interest from multiple luxury brands. As was the case in the previous quarter, appetite to open new stores in the area is extremely high among luxury brands, especially those without a current street-level presence in Shinsaibashi and those wishing to improve their current store location. With few vacancies available on Mido-suji, competition among retailers is likely to drive up rents. The Shinsaibashi-suji shopping district is seeing demand for pop-up stores from a range of industries including apparel, food retail, and outdoor and sporting goods. At the same time, however, vacancies continue to increase as a result of store closures, in some cases involving popular tenants. Furthermore, a number of landlords which have been marketing vacant units for lease for some time now are seeing retailer interest dwindle, leading some owners to consider lowering their asking rents. Figure 14: High street vacancy rate & high street rent in Shinsaibashi (JPY/tsubo)
16%
144,000
14%
143,000
12%
142,000
10%
141,000
8%
140,000
6%
139,000
4%
138,000
2%
137,000
In secondary areas, an available property on Mido-suji north of Nagahori-dori confirmed a wristwatch brand as its new tenant in Q2 2022, at the asking rent which was at par with the current market level. Another available property on Nagahori-dori is under consideration by a food retailer planning to open a store in anticipation of the recovery of inbound tourist demand. Elsewhere, a retailer with an existing outlet in America-mura, which was planning to relocate to new premises in the Shinsaibashi-suji shopping district, has changed its strategy and has elected to renew its current contract instead. The retailer in question appears to have been concerned by the increasing vacancy in the Shinsaibashi-suji shopping district, which has made the area somewhat less appealing to consumers as a convenient shopping destination.
Kansai: Umeda Prime rents fall due to limited number of new openings in the high street Umeda high street rents fell by 0.5% q-o-q to JPY 94,500 per tsubo this quarter, primarily as a result of flagging demand for new openings from retailers able to afford high-end rents. As a result, the Umeda area was the only one of the 10 areas nationwide surveyed by CBRE in which prime rents fell over the quarter. As was the case in Q1 2022, new high street store openings were very limited in number. While demand was seen from large-scale retailers and showroom operators, very few contracts were signed due to the fact that prospective tenants are only prepared to pay 20 to 30% less than what landlords are asking. Some retailers planning to open street-level stores in the Umeda area have switched their focus to other areas, or to upper floors in shopping mall complexes. During the quarter, a digital telecommunications brand opened its first Kansai region store in a newly completed building in the secondary area of Chayamachi. The brand in question has also opened a pop-up store on the same site to promote the goods sold through its e-commerce channels. Above street level, demand continued to be seen for store space from cosmetic clinics and beauty salons, while demand from this sector was also seen for available properties south of JR Osaka Station. As a whole, demand for properties in secondary areas was slightly up from the previous quarter.
136,000
0% Q2 2021
Q3 2021
Vacancy Rate
High Street Rent
Q4 2021
Q1 2022
Q2 2022
High Street Rent Vacancy Rate
Source: CBRE, Q2 2022.
7
CBRE RESEARCH
© 2022 CBRE, INC.
MarketView | JAPAN RETAIL | Q2 2022
Kansai: Kyoto
Kansai: Kobe
New openings and demand for stores targeting domestic consumers
Multiple new store openings seen around department stores
The high street vacancy rate for Q2 2022 fell by 0.7 pp q-o-q to 7.3%, mainly due to the opening of several new stores and some properties being taken out from the basket due to reconstruction.
The high street vacancy rate for Q2 2022 rose by 0.5 pp q-o-q to 7.6%, as a result of several vacancies in Sannomiya Center-gai.
During the quarter, a new general goods store opened on the Shijo-dori high street, while a shop specializing in purchase of high-end brand goods (to be sold in other outlets) secured another available property on Shijo-dori. Both stores represent the retailer’s first entry into the Kyoto market, while contracted rents appear to be at or slightly below the asking rents. New openings and demand for stores from retailers targeting domestic consumers have been widely observed. In contrast, rents in areas which has concentration of stores targeting foreign tourists continued to decline. As a result, Kyoto high street rents for the quarter fell by 0.8% q-o-q to JPY 65,000 per tsubo.
In Q2 2022, premises were secured by a fashion brand for the launch of a new store in the Sannomiya Center-gai high street, while a pet shop chain, having performed strongly during the pandemic, confirmed the opening of a new store. Following the completion of the refurbishment of the Kobe Hankyu department store on Flower Road, multiple luxury brands have opened stores in the property. Also this quarter in the Former Foreign Settlement area, the Daimaru department store announced that it will lease the space directly to the east of its Kobe store. The street-level unit has already confirmed a new retail tenant, while a few popular luxury brands have relocated to the surrounding area. However, the area some distance from the department stores is struggling to attract retailer interest. As a result, Kobe high street rents fell by 1.0% to JPY 72,300.
Also this quarter, a fashion brand opened a new store in the secondary area of Shinkyogoku-dori after relocating from a high street area. With its new premises featuring more floor space than before, it has been able to establish an event space within the unit. Relocations of this type from the high street to secondary areas such as Sanjo-dori, Shinkyogoku or Teramachi have been widely observed since the advent of the pandemic. Lower rent levels and the fact that Gen Z consumers tend to frequent these areas are seen as the primary reasons for such moves.
Figure 15: High street vacancy rate & high street rent in Kyoto (JPY/tsubo)
Figure 16: High street vacancy rate & high street rent in Kobe (JPY/tsubo)
9%
80,000
9%
80,000
8%
78,000
8%
78,000
7%
76,000
7%
76,000
6%
74,000
6%
74,000
5%
72,000
5%
72,000
4%
70,000
4%
70,000
3%
68,000
3%
68,000
2%
66,000
2%
66,000
1%
64,000
1%
64,000
0%
62,000
0%
Q2 2021 Vacancy RateRent High Street Source: CBRE, Q2 2022.
8
In secondary areas, an available property in the Former Foreign Settlement area drew interest from multiple retailers over the quarter. The unit is in close proximity to the area where luxury brand stores are concentrated and has a flexible floor space of 30 tsubo. Elsewhere, an available property on Meriken Road secured a recycled goods retailer as its new tenant at roughly market-level rent.
CBRE RESEARCH
Q3 2021
Q4 2021
HighVacancy StreetRate Rent
Q1 2022
Q2 2022
62,000 Q2 2021 Vacancy RateRent High Street
Q3 2021
Q4 2021
Q1 2022
Q2 2022
HighVacancy StreetRate Rent
Source: CBRE, Q2 2022.
© 2022 CBRE, INC.
MarketView | JAPAN RETAIL | Q2 2022
Nagoya: Sakae
Fukuoka: Tenjin
High street rents slide by 0.7% to JPY 70,000
Owners broaden target industries rather than lower asking rents
The high street vacancy rate for Q2 2022 fell by 0.8 pp q-o-q to 0.0%. However, several properties are being on offer, some of which include relatively large size.
The high street vacancy rate for Q2 2022 fell by 0.6 pp q-o-q to 5.0%, with a new tenant confirmation in relatively large property.
An available property on the Otsu-dori high street attracted interest from multiple retailers this quarter, including luxury brands, general goods, and outdoor and sporting goods brands. In light of the current market situation, the property’s owner has expressed a willingness to accept rental offers a few percent below what the current tenant is paying. Another available property on the south side of Otsu-dori saw demand from a fast fashion retailer and an automotive showroom, while one on Hirokoji-dori was leased to a wristwatch brand, albeit after negotiations to lower the asking rent. As a result of these transactions, Sakae high streets rents fell by 0.7% q-o-q to JPY 70,000 per tsubo.
An available property on the Tenjin Nishi-dori high street secured an amusement arcade as its new tenant in Q2 2022. In response to weak retailer demand, the owner elected to broaden the range of industries it was willing to accept. The contracted rent is equivalent to or slightly above the original asking rent. Meanwhile, a separate property on Tenjin Nishi-dori has stood vacant for some time. While it has attracted interest from several retailers, the rent levels and initial costs for CapEx items such as interior decor have dissuaded interest from potential tenants. Rather than lowering the asking rent, the owner has elected to mitigate this problem by broadening the range of industries being considered. Tenjin high street rents remained unchanged for the third straight quarter at JPY 46,500.
During the quarter, an available property in the secondary area of Iriecho-dori was leased by a furniture and general goods retailer, buoyed by its thriving sales figures during the pandemic. While the original unit extended across two levels, agreement was reached after reducing it to one. Elsewhere, a unit previously occupied by a food retailer confirmed a separate food retailer as its next tenant.
During the quarter, a new store was opened by an outdoor and sporting goods brand in a secondary area on Kokutai-doro, representing the retailer’s first entry into the Kyushu market. Meanwhile, another available property on Kokutai-doro was secured by a shop specializing in the purchase of high-end brand goods (to be sold in other outlets). Both new stores are operated by companies whose sales have performed strongly during the pandemic, and which are also opening new stores in other areas.
Figure 17: High street vacancy rate & high street rent in Sakae
Figure 18: High street vacancy rate & high street rent in Tenjin
6%
75,000
6%
75,000
5%
70,000
5%
70,000
4%
65,000
4%
65,000
3%
60,000
3%
60,000
2%
55,000
2%
55,000
1%
50,000
1%
50,000
45,000
0%
0% Q2 2021
Q3 2021
High Street Rent Vacancy Rate
Source: CBRE, Q2 2022.
9
CBRE RESEARCH
Q4 2021
Vacancy Rate High Street Rent
Q1 2022
Q2 2022
45,000 Q2 2021 Vacancy HighRate Street Rent
Q3 2021
Q4 2021
Q1 2022
Q2 2022
High Street Rent Vacancy Rate
Source: CBRE, Q2 2022.
© 2022 CBRE, INC.
MarketView | JAPAN RETAIL | Q2 2022
Figure 19: Key Store Openings in Kansai, Nagoya and Fukuoka Q2 2022
Tenant
Area
Street Name
Size* (approx tsubo)
UMEDA
N/A
N/A
BUZZ CHAYAMACHI
Lee Mart
SHINSAIBASHI
Midosuji
30
Gurukasu City Building
Herman Miller
SHINSAIBASHI
Nagahori-dori
70
PRAIRIE Shinsaibashi Building
Standard Products
KYOTO
Shijo-dori
110
Nittochi Kyoto Shijo-dori Building
STUDIO ATAO
KYOTO
Karasuma-dori
35
LAQUE Shijo Karasuma
AINZ & TULPE
KOBE
Sannomiya Center gai
N/A
Sannomiya Zero Gate
BALENCIAGA
KOBE
Flower road
N/A
Kobe Hankyu
YOSHIDA
SAKAE
Otsu-dori
N/A
ABLE Building
MAISON SPECIAL
SAKAE
Mitsukura-dori
80
Tatsuko Building
NISHIKAWA
TENJIN
Meiji-dori
80
Tenjin Heiwa Building
TREK
TENJIN
Kokutai-doro
130
Diamondhills Daimyo Sakaguchi Building
Rakuten Mobile
Building Name
*Information in the above table are limited to those available on press releases, media reports, and other public domain. CBRE estimates are not included. Source: CBRE, company press releases and media reports, Q2 2022.
Figure 20: Upcoming Retail Developments in Kansai, Nagoya and Fukuoka (GFA of 1,000 tsubo or more)
Name
Area
GFA (approx tsubo)
Developer
Open
Chunichi Building
SAKAE
34,000
The Chunichi Shimbun, Chunichi Building
(Tentative) Umeda 3-Chome Plan
UMEDA
69,000
Japan Post Holdings, West Japan Railway Company, etc.
Mar. 2024
(Tentative) Umekita Phase 2 Development Project
UMEDA
169,000
ORIX Real Estate Corporation, Hankyu Railway, etc.
Aug. 2024
Osaka Station New Station Building (Tentative)
UMEDA
17,800
Osaka Terminal Building
Fall 2024
(Tentative) Hulic Fukuoka Building Redevelopment
TENJIN
6,300
Hulic
Sep. 2024
Fukubiru Urban Area Redevelopment Project
TENJIN
44,000
Nishi-Nippon Railroad
Dec. 2024
(Tentative) Tenjin 1 chome North 14bangaiku Building
TENJIN
11,900
Nippon Life Insurance, SEKISUI HOUSE
Mar. 2025
(Tentative) Sumitomoseimei Fukuoka Bldg・Nishidori Business Center Redevelopment
TENJIN
12,700
SUMITOMO LIFE INSURANCE, FUKUOKA JISHO
May. 2025
SHINSAIBASHI
14,000
Hulic, Takenaka, JR WEST REAL ESTATE & DEVELOPMENT, PARCO
Feb. 2026
Effective utilization of land for Nishiki 3-chome 25 bangai-ku
SAKAE
33,200
Nagoya city, PARCO, Mitsubishi Estate, etc.
Kumoidori 5 chome area Redevepolment Project
KOBE
29,800
Kobe city, Mitsubishi estate, Mitsubishi Logistics, TC KOBELCO REAL ESTATE, etc.
FY 2027
JR Sannomiya New Station Building development Project
KOBE
30,300
West Japan Railway Company, Urban Renaissance Agency, Kobe city
FY 2029
(Tentative) Shinsaibashi Project
Spring 2024
Summer 2026
Note: Floor area may contain non-retail spaces. Source: CBRE, company press releases and media report, Q2 2022.
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CBRE RESEARCH
© 2022 CBRE, INC.
MarketView | JAPAN RETAIL | Q2 2022
Figure 21: Vacancy Rate
Figure 23: High Street Rent (JPY / Tsubo / Month)
Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022
Q3 2021
Q4 2021
Q1 2022
Q2 2022
Ginza
243,000
241,500
241,500
241,500
241,500
Omotesando/Harajuku
173,800
173,800
173,800
177,800
183,800
Shinjuku
177,500
172,000
170,000
170,000
170,000
Shibuya
127,700
126,800
126,800
126,800
126,800
Shinsaibashi
138,100
141,000
141,000
142,000
142,000
Umeda
113,500
95,000
94,000
95,000
94,500
Kyoto
66,500
65,500
64,500
65,500
65,000
Kobe
74,000
71,000
72,000
73,000
72,300
Ginza
5.1%
5.2%
4.3%
4.5%
3.1%
Omotesando /Harajuku
5.0%
4.8%
7.7%
7.2%
6.2%
Shinjuku
3.7%
4.6%
5.8%
8.0%
10.2%
Shibuya
4.6%
2.9%
3.1%
12.3%
9.1%
Shinsaibashi
8.7%
11.9%
12.7%
14.5%
13.1%
Kyoto
7.8%
7.8%
6.1%
8.0%
7.3%
Kobe
4.0%
6.5%
4.9%
7.1%
7.6%
Nagoya
Sakae
0.0%
0.0%
0.0%
0.8%
0.0%
Nagoya
Sakae
70,500
70,500
70,500
70,500
70,000
Fukuoka
Tenjin
3.6%
2.3%
3.6%
5.6%
5.0%
Fukuoka
Tenjin
47,500
46,500
46,500
46,500
46,500
Q2 2021
Q3 2021
Q4 2021
Q1 2022
Q2 2022
Ginza
400,000
400,000
400,000
400,000
400,000
Omotesando/Harajuku
300,000
300,000
300,000
320,000
350,000
Shinjuku
300,000
300,000
300,000
300,000
300,000
Shibuya
300,000
300,000
300,000
300,000
300,000
Shinsaibashi
250,000
250,000
250,000
250,000
250,000
Umeda
165,000
140,000
140,000
140,000
130,000
Kyoto
90,000
90,000
90,000
90,000
90,000
Kobe
100,000
120,000
120,000
120,000
120,000
Nagoya
Sakae
100,000
100,000
100,000
100,000
100,000
Fukuoka
Tenjin
100,000
100,000
100,000
100,000
100,000
Tokyo
Kansai
Tokyo
Kansai
Source: CBRE, Q2 2022.
Source: CBRE, Q2 2022.
Figure 22: Area Traffic Volume (Q2 2022)
Figure 24: Prime Rent (JPY / Tsubo / Month)
Ginza
Tokyo
Omotesando /Harajuku Shinjuku Shibuya Shinsaibashi
Kansai
Kyoto Kobe
Nagoya
Sakae
Fukuoka
Tenjin
Q-o-Q
Y-o-Y
＋18%
＋24%
＋14%
＋20%
＋14%
＋13%
＋13% ＋13% ＋17% ＋9%
＋16% ＋6%
＋24%
CBRE RESEARCH
Tokyo
＋14%
＋23%
Kansai
＋16% ＋11% －2%
* Aggregation of “au” smartphone users with individual consent, processed so that individuals cannot be identified. Source: Giken Shoji International “KDDI Location Analyzer*” CBRE, Q2 2022.
11
Q2 2021
Source: CBRE, Q2 2022.
© 2022 CBRE, INC.
MarketView | JAPAN RETAIL | Q2 2022
Terms and Definitions
Vacancy Rate Subject Area Prime rent/ High Street Rent Area Traffic Volume Quarterly
Term
Vacancy Rate
Survey method
Prime rent High Street Rent Area Traffic Volume
• Vacancy rate for ground floor of 155 properties located in Ginza, 240 properties located in Omotesando/Harajuku, 58 properties located in Shinjku, 65 properties located in Shibuya, 169 properties located in Shinsaibashi, 174 properties located in Kyoto, 108 properties located in Kobe, 53 properties located in Sakae, and 202 properties located in Tenjin, in the high street areas assigned by CBRE • Only the spaces which are physically available for tenants at the time of survey are defined as vacant • Ground floor retail space for lease located in retail markets in in the high street areas assigned by CBRE with floor area of approx. 200 square meters.
Tokyo
Yokohama
Meiji Yasuda Seimei Building 2-1-1 Marunouchi, Chiyoda-ku, Tokyo
Yokohama ST Building 1-11-15 Kitasaiwai, Nishi-ku, Yokohama-shi, Kanagawa
Shiba Park
Kanazawa
Shiba Park Building B 2-4-1 Shibakoen, Minato-ku, Tokyo
Aube II Building 5-177 Kuratsuki, Kanazawa-shi, Ishikawa
Osaka
Nagoya
Grand Front Osaka 4-20, Ofuka-cho, Kita-ku, Osaka-shi, Osaka
Miyuki Building 3-20-27 Nishiki, Naka-ku, Nagoya-shi, Aichi
Sapporo
Hiroshima
Nihon Seimei Sapporo Building 4-1-1 Kitasanjonishi, Chuo-ku, Sapporo-shi, Hokkaido
Shishinyo Building 3-17 Fukuromachi, Naka-ku, Hiroshima-shi, Hiroshima
• The retail market areas assigned by CBRE Q1) End of March Q2) End of June Q3) End of September Q4) End of December • Physically available for tenants at the time of survey • Based on sample survey of the subject area, including CAM, and excluding any incentive such as free rent • Rents for prime areas within the main retail districts in major cities • Average of the upper rents and lower rents based on sample survey of the subject area, including CAM, and excluding any incentive such as free rent • y-o-y and q-o-q % changes of traffic volume in the subject area
Contacts
Sendai
Hiroshi Okubo
Kaoru Kurisu
Kumiko Ninomiya
Head of Research
Director
Analyst
Sendai Mark One 1-2-3 Chuo, Aoba-ku, Sendai-shi, Miyagi
hiroshi.okubo@cbre.co.jp
kaoru.kurisu@cbre.co.jp
kumiko.ninomiya@cbre.co.jp
Fukuoka Fukuoka Center Building 2-2-1 Hakata-Ekimae, Hakata-ku, Fukuoka-shi, Fukuoka
To learn more about CBRE Research, or to access additional research reports, please visit the Insights & Research at www.cbre.com/Insights&Research
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© Copyright 2022. All rights reserved. This report has been prepared in good faith, based on CBRE’s current anecdotal and evidence based views of the commercial real estate market. Although CBRE believes its views reflect market conditions on the date of this presentation, they are subject to significant uncertainties and contingencies, many of which are beyond CBRE’s control. In addition, many of CBRE’s views are opinion and/or projections based on CBRE’s subjective analyses of current market circumstances. Other firms may have different opinions, projections and analyses, and actual market conditions in the future may cause CBRE’s current views to later be incorrect. CBRE has no obligation to update its views herein if its opinions, projections, analyses or market circumstances later change.
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