Upscale Residential Areas in Tokyo Ⅱ

With a population of around 14 million people, Tokyo is one of the largest metropolitan areas in the world, known for its sprawling business districts filled with high-rise buildings. But not many people, even Japanese, are familiar with its residential areas.

Tokyo is a highly attractive area for real estate investment, but for foreign investors living overseas, it can be difficult to obtain information about the investment properties available.

In this second article in the series, we introduce Tokyo’s upscale residential areas of Aoyama, Takanawa, and Shirokane, explaining each area’s characteristics as well as their advantages and disadvantages in terms of real estate investment.

■Aoyama (Tokyo Minato Ward)

• Characteristics and Charm

The Aoyama district in Minato Ward is one of the most famous upscale residential areas in Tokyo, and is popular not just with affluent Japanese but also with expatriates.

The biggest charm of Aoyama is the district’s perfect amalgamation of residential area tranquility urban activity.

The adjacent neighborhood of Omotesando is a famous commercial district that features many high-end boutiques, designer brand shops, and beauty salons frequented by celebrities. On weekends and holidays, it is always bustling with shoppers and tourists.

But Aoyama also has a prominent cultural and academic aspect, being home to institutions such as the vast Aoyama Cemetery, the Taro Okamoto Memorial Museum, and the Aoyama Gakuin University.

Furthermore, one of the biggest reasons why the rich choose to live in Aoyama is it abundance of luxurious restaurants where you can enjoy traditional Japanese or international cuisine prepared by world-famous chefs.

• Real Estate Investment in Aoyama

Because of its reputation as an upscale neighborhood, as well as its convenient location just 10 to 15 minutes on foot from Shibuya Station, property owners in Aoyama can set high rents and still expect a consistently high demand.

Furthermore, since it is situated in central Tokyo, real estate values in Aoyama have a high potential for growth even in the face of Japan’s population decline, so property owners can expect an increase in the value of their assets.

Of course, the high popularity of Aoyama also means that property prices are very expensive, and you would need a much higher capital to obtain real estate.

Furthermore, competition for Aoyama real estate can be fierce, with many long-time investors grabbing up any real estate that becomes available.

Capital strength and good timing are thus important for investing in Aoyama. Investors should have the perseverance to sustain a long-term investment approach.

Property values in Aoyama can vary greatly, and a typical family detached house or condominium unit can go from 2 million to several tens of millions of yen.

Investing in Aoyama real estate thus requires a strategic approach that takes into account the balance between the property type and your budget.

■Takanawa (Tokyo Minato Ward)

• Characteristics and Charm

The Tokyo Bay (Wangan) area is one of the most prominent areas in Tokyo undergoing rapid urban redevelopment. Situated in this area is the upscale residential neighborhood of Takanawa.

The area has undergone many remarkable changes through redevelopment projects, as exemplified by the recent opening of Takanawa Gateway Station, the newest station on the Yamanote Line. But Takanawa was already known as an upscale neighborhood even before this redevelopment began.

Many high-rise apartments and condominiums in Takanawa offer a great view of the famous Tokyo Tower, especially at night. Takanawa is also a popular area for big-spending tourists, and it is home to several luxury hotels such as the Grand Prince Hotel Takanawa.

Located within walking distance of Takanawa are several prominent spots, including the Sengaku-ji Temple built in 1612, and Shiba Park, an urban oasis filled with rich greenery.

Takanawa’s proximity and ease of access to Haneda International Airport also makes it a popular residential area with expatriates.

• Real Estate Investment in Takanawa

As a neighborhood that has always been popular with rich Japanese and expatriates as well as tourists, real estate in Takanawa has a consistently high demand and value. And with the recent urban developments in the Tokyo Bay area, one can expect land prices to increase further, making Takanawa a prime area for real estate investment.

On the other hand, the recent urban redevelopments have caused a decrease in residential lots for detached houses. Apartments and condominium units for sale have also become rare, so it is currently difficult to obtain a property in Takanawa.

Property prices per unit floor area depend on the factors such as the building construction and unit type, but it typically ranges from 5 million to 10 million yen. And with few properties available, Takanawa can be a difficult market for real estate investment, and judging the balance of risk and reward becomes important.

If you are thinking about investing in Takanawa real estate, you should consider employing the services of a Japanese real estate agency that has plenty of experience with the area.

■Shirokane (Tokyo Minato Ward)

• Characteristics and Charm

The upscale residential neighborhood of Shirokane has long been associated with the term “Shiroganese” (an homage to the “Milanese” of Italy). This term refers to the affluent ladies who reside in Shirokane and frequent its luxury shops and restaurants.

Shirokane is located adjacent to Takanawa, but the former has a stronger image of being a quiet residential neighborhood surrounded by rich verdure. It has attracted many rich Japanese looking for a relaxing residential atmosphere in the middle of the Tokyo metropolis.

Shirokane is home to many Michelin-starred luxury restaurants, fashion boutiques, and other high-end shops. But it also provides easy access to other parts of Tokyo, making it a neighborhood that is both functional and convenient.

• Real Estate Investment in Shirokane

As a well-established upscale neighborhood among the Japanese populace, Shirokane real estate offers investors a stable source of rental income. But this popularity means that competition for properties in the area is fierce.

Prices per unit floor area vary depending on the property conditions and specific location, but it generally ranges from 5 million to 10 million yen, so potential investors will need a large amount of capital.

The key to a successful real estate investment in Shirokane is finding the perfect timing during the rare occasions when a current property owner decides to sell.

In this article, we introduced the Tokyo upscale residential neighborhoods of Aoyama, Takanawa, and Shirokane.

As with most other upscale neighborhoods in Tokyo, real estate investment these areas can be a cutthroat competition for obtaining desirable properties. Getting the support of a reliable real estate agency is thus indispensable.

If you are looking to make a successful real estate investment in a luxurious Tokyo neighborhood, you should find a good real estate agent as your partner, maintain a long-term perspective, and take a careful but smart investment strategy.