Japan Retail MarketView Q3 2026

Average rents reach all-time highs in three areas;

Asian brands show strong expansion appetite

• Average rents rose q-o-q in four of the ten surveyed areas (Shinjuku, Shibuya, Kyoto, and Tenjin) in Q3 2026. Rents in these areas (excluding Shinjuku) recorded all-time highs, while prime rents also reached historical highs in Tenjin. Average rents in the remaining six areas were flat.

• Prime area vacancy declined q-o-q in two areas (Kobe and Tenjin). Kobe joined the list of areas with a vacancy rate of 0.0%, bringing the number of areas with no vacancy to five (Ginza, Shinjuku, Shibuya, Shinsaibashi, and Kobe).

• Retailer demand was led by the reuse and fashion categories. Asian fashion and character goods retailers expanded their footprint over the quarter, submitting applications for available units across multiple areas.

• Aside from drugstores exiting or closing existing stores in Shinsaibashi, no change was observed in retailers' recent strong appetite for expansion. With supply-demand conditions set to remain tight on the back of solid and diverse tenant demand, upward pressure on average rents is projected to continue.