Savills

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Tokyo Residential: Ultra Luxury

Tokyo's ultra-luxury market gains further momentum

 

  • Tokyo's ultra-luxury residential market has grown on the back of the sector's sound fundamentals.
  • Japan's stability has made the country a favourable avenue to preserve wealth.
  • Large-scale redevelopment projects in the pipeline will add more ultra-luxury units and raise the top prices of the market to levels equivalent to those seen in Manhattan and London.
  • The number of branded residences in Tokyo is likely to increase going forward, and this growth will accelerate especially if other sectors, such as offices, continue to face uncertainty.
  • Some future projects are likely to change initial plans by replacing some space originally meant for offices with ultra-luxury residences.
  • While there are many developments in the pipeline that are suitable to accommodate ultra-luxury units, the success of each project will be also determined by its ability to provide the expected levels of service while keeping costs under control.
  • Japan's GDP growth per working age population has fared better than most of the other G7 nations over the last two decades, providing evidence of the country's long-term prospects. However, the negative impacts from the ageing population have had a lingering effect.

Although Tokyo's ultra-luxury residential market is considered relatively new, it is growing rapidly and has gained popularity over time. Indeed, some recent projects in this sector have proven successful, illustrating that substantial demand exists for the right products. Current developments in the pipeline will add new ultra-luxury units into the market and likely raise the top prices of the market to levels equivalent to those seen in Manhattan and London.

Savills Research & Consultancy
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GRAPH 1 | Top 10 Countries/regions by UHNWI Population, 2020