The ultra-luxury residential market is relatively new to Tokyo and prior to the pandemic there was only a handful of ultra-luxury apartments, with prices above ¥1bn ($8m). However, a number of developments are underway which will change the landscape dramatically.

Tetsuya Kaneko, head of research and consultancy at Savills Japan, says: “Although Tokyo’s ultra-luxury residential market is considered relatively new, it is growing rapidly and has gained popularity over time. 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.”

Japan has strong economics underpinning the development of ultra-luxury apartments: it has the third largest number of ultra-high worth individuals (people with more than $30m of net assets) behind the US and China. Meanwhile Tokyo is home to more than 7,500 ultra-wealthy people, behind only New York and Hong Kong – two cities with thriving ultra-luxury apartment markets.

Tokyo has many of the amenities wealthy buyers require, such as luxury retail in Ginza and more than 200 Michelin-starred restaurants. As such, it is the scene of most Japanese ultra-luxury development.

The central Minato district and surrounding areas are home to a number of developments, including Toranomon Hills Residential Tower, which opened in early 2022. This property is rumoured to house a unit priced well over ¥10bn – the most expensive condominium unit in Japan. Next year, Mori Building’s Toranomon-Azabudai project (pictured above) will add 1,400 apartments and 91 Aman hotel residences. The most expensive apartment is understood to be on the market for ¥20bn. Overseas investors are also tapping the market. BPE Asia developed Marq Omotesando One in the eponymous shopping district.

Branded residences such as the Aman Residences are an important part of the ultra-luxury apartment market in other cities, offering hotel services to owners. Outside of Tokyo, these can be found in popular tourist destinations such as ski resort Niseko and Kyoto.

A key challenge for the market going forward will be to provide the service levels required by ultra-wealthy buyers. More developers are expected to partner with hotel groups in order to tap their service expertise. Additionally, Japan will need to re-open fully to international travel and tourism if it is to attract foreign buyers.

Kaneko says: “The market is likely to keep growing as Tokyo continues to transform through redevelopment. As the market matures and a proof of concept has been established for the sector, the market should become more diverse with more players and products, eventually leading to Tokyo becoming an established market.”

Further reading:
Tokyo residential report

Contact us:
Tetsuya Kaneko