- Being located just outside of Tokyo’s central five wards (C5W), and with a wellestablished business district, Shinagawa real estate is likely the safest bet in Greater Tokyo outside of the C5W (the Tokyo Periphery).
- Despite having some of the highest rents amongst Tokyo’s 18 outer wards (18W), the Shinagawa Ward continues to attract a large number of residents in their 20s, with the number picking up over the past two years.
- Housing starts data indicates that the market has been undersupplied in terms of multifamily residential units – suggesting that rents could see some additional upside.
- Although office rents have grown substantially over the past few years, the market still offers a nearly 40% discount in Grade A office space over the C5W. That said, pricing varies significantly by neighbourhood.
- Increasing availability in the C5W resulting from COVID-19 could lead to an early rise in vacancy in Shinagawa Ward’s peripheral neighbourhoods, such as Tennozu Isle and Shinagawa Seaside, as tenants take advantage of the opportunity to secure more convenient office space in the city centre.
- Looking ahead, Shinagawa Station will host the Tokyo platform of the first Maglev line, which is set to open in 2027 and will reduce railway travel time to Nagoya by 60%. Leading up to this, the station is set to see a major expansion accompanied by new developments in the surrounding area.
Tokyo’s newest gateway has long-term potential
Shinagawa’s convenience combined with its affordability compared to Tokyo’s central five wards have made it an attractive alternative for residents and corporate tenants alike, particularly in the latter stages of this upswing. Although the submarket might experience some volatility in the near-term as a result of COVID-19, Shinagawa’s prospects are positive on a long-term basis.
Savills Research & Consultancy