Tokyo Luxury Residential Boom

Tokyo’s ultra-luxury residential market has continued to grow on the back of the redevelopment seen in the city. The city has seen a slate of large redevelopment projects over the past few years which have added new landmarks and improved city infrastructure. Over the next decade, more projects are in store and will continue to reshape the city’s physical and economic landscapes.  

The ultra-luxury residential segment is expected to evolve further while Tokyo is undergoing this transformation. While the market is still considered a niche one, it is expanding. Indeed, before the pandemic, the total number of ultra-luxury units was around 50, but this figure has been steadily increasing. This could be primarily attributed to the mega-sized developments in areas such as Toranomon and Azabudai. Moreover, with the ambiguity about the office sector’s prospects, it is also a possibility that some space originally planned for offices in new mixed-use towers will instead be sold as ultra-luxury residential units. 

Japan is home to one of the largest ultra-high-net-worth individual (UHNWI, Individuals with over US$30m in net worth. ) populations, which provides a strong demand base for the ultra-luxury market. Furthermore, overseas investors perceive the country as a suitable avenue for wealth mainly due to its economic and social stability, which has been especially attractive attributes during the pandemic. Although the world is gradually shifting towards normalcy from the pandemic, rising geopolitical tensions will likely lead to continued uncertainty. In addition, Japan has steadily evolved into a luxury travel destination, and this could also be a tailwind for the progress of the ultra-luxury market.