Tokyo residential occupancy rate hits 97.2% in Q1

Occupancy rates are expected to maintain its momentum throughout 2024.

Residential ccupancy rates in the Tokyo 23W rose by 0.2ppts QoQ to 97.2% in Q1/2024 according to data from Savills, while also increasing marginally by 0.1ppt on an annual basis. 

“Although still slightly shy of the pre pandemic peak level, average occupancy rates exhibited a steady improvement overall in 2023, and look to maintain this momentum moving into 2024,” the analyst said.

Here’s more from Savills:

The situation in the C5W mirrors this sentiment, with occupancy remaining at a tight level of 96.9%, and is approaching the pre-pandemic figure. 

Growing rates of in-office participation continue to proceed gradually but steadily. Although hybrid work arrangements will likely persist as a corporate perk, particularly among large companies, most workers commute to the office more often than working from home, which likely encourages greater interest in residences within close proximity to offices in central business districts. 

This has been a major driver of net migration to Tokyo 23W in the post pandemic era. In addition, Japan has attracted noticeable numbers of foreign residents throughout 2023, which have comprised a majority of the population growth seen over recent quarters, and this trend looks to continue unabated for the meantime. 

All constituent wards of the 23W have enjoyed positive net migration throughout 2023, which has supported the steady improvement in occupancy rates. Central wards will continue to attract high-income residents who are less affected by inflation, and who seek proximity to offices, amenities, and entertainment options. 

Meanwhile, peripheral areas will remain popular among renters who continue to work from home more often, those who have not enjoyed meaningful wage growth, and families seeking larger living spaces. Sound population growth will likely continue in 2024, especially with this spring moving season, and the prospects for further improvements in occupancy across all submarkets are bright.