- Land prices at many station-side areas on the Tokyo periphery have already surpassed 2008 levels and, in many cases, have seen stronger growth than key hubs in the central five wards.
- Population growth in Greater Tokyo has outperformed forecasts based on the 2015 census, with population estimates for most wards and cities already exceeding the levels forecasted for October 2020.
- Annual surveys of Greater Tokyo residents demonstrate a strong interest in peripheral railway hubs, with the Yokohama, Kichijoji, Ikebukuro, and Omiya station areas consistently ranking among the most desirable locations to live.
- Office and residential investment volumes in Greater Tokyo outside of the C5W amounted to JPY874 billion in 2019, growing 34% YoY, and stands even higher than that of the C5W in 2020.
- Preferences for locations to live and work are likely to change once the COVID-19 pandemic comes under control, as companies may look to open satellite offices in railway hubs outside of central Tokyo whilst residents may seek more spacious accommodations as more time is spent at home.
- A portion of land in Western Tokyo that was once designated exclusively for agricultural use may be opened up for nonagricultural development, potentially leading to a glut of land entering the market.
Investment opportunities may emerge beyond central Tokyo
Even as COVID-19 has disrupted Japan’s bullish market, opportunities to purchase core-type assets in Tokyo’s CBD remain limited, as most owners choose to hold on to prime property. Given the capital region’s comprehensive railway infrastructure, investors may be able to look beyond central Tokyo for buying opportunities, potentially capitalising off of shifting demand trends – especially those that may emerge during/after the pandemic.
Savills Research & Consultancy