Tokyo：The period saw weaker leasing demand due to the adverse effects of COVID-19. However, some luxury brands remain upbeat about opening stores in prime locations. As a result, Tokyo prime rents were unchanged at JPY 400,000 (tsubo/month) for the 20th consecutive quarter (*1). However, store demand among retailers is generally subdued due to decrease in inbound demand and deterioration of domestic consumption. As a result, Ginza high streets rents fell by 2.1% q-o-q to JPY 247,000 (tsubo/month) in Q3 2020.
*1 CBRE did not compile prime rents in Q1 2020 as the spread of COVID-19 made it difficult to draw up rent estimates owing to a sharp drop in lease contracts.
Osaka：Osaka’s prime rent was JPY 250,000 (tsubo/month), unchanged from the previous quarter. Multiple luxury brands selling high-end wristwatches displayed strong interest in an available property on Mido-suji, a prime high street area, driven by sales growth as a result of the wealth effect on the back of stable stock market. Meanwhile, in the Shinsaibashi-suji shopping district, multiple tenants have permanently closed stores or withdrawn from the area. Most of these shops are small, with tenants paying rent above the market rate in anticipation of being able to secure business from inbound tourists.
Nagoya：In the Sakae area of Nagoya, lack of demand from drugstores, which had been driving rental rates in the area, resulted in Nagoya prime rent fall by 16.7% q-o-q to JPY 100,000 tsubo/month. One relatively large unit on Otsu-dori, a prime high street area, was leased this quarter by offering a significantly lower rate than the pre-pandemic level. Elsewhere, a retailer chose to relocate its store to within a major retail facility for cost reduction purpose.