#Japan #Tokyo #luxury retail #Japan tourism #Cushman&Wakfield

C&W Retail Market Report Q4 2025

Cushman & Wakefield (C&W), a global real estate services firm based in Chicago, has published its latest report on the retail market, revealing significant trends in Japan's tourism sector as well as developments in luxury retail. Despite restrictions on travel from China, Japan's inbound tourism has reached historic highs, showcasing resilience and diversity in visitor demographics.

Inbound Tourism Figures

For the year 2025, Japan's inbound tourism market has shown continuous growth, with the total number of visitors and consumption hitting unprecedented levels. However, the fourth quarter saw notable shifts in visitor composition. Specifically, a 45.3% decrease in visitors from China was recorded in December, likely due to the government's travel advisories. This drop impacted the sales of duty-free stores heavily frequented by Chinese tourists, resulting in a 17.1% decline in December compared to the previous year.

In contrast, the year saw a significant increase in the influx of tourists from Europe, the United States, Australia, and Taiwan, along with a rise in per capita spending, which mitigated the adverse effects of declining visitors from certain regions. Ultimately, approximately 42.68 million international visitors came to Japan in 2025, while travel spending surged by 16.4% year-on-year. The diversification of visitor nationalities and an uptick in spending per visitor played crucial roles in expanding overall market size.

Luxury Retail Expansion

Tokyo has recently witnessed a surge in the opening of flagship stores by global luxury brands. In November, Bulgari opened a new location in Omotesando, showcasing architectural elegance inspired by Rome. December saw Loewe inaugurate the 'Casa Loewe Ginza', the largest location of its kind in Japan, which also features a world-first gift counter. Additionally, Batch Coffee, specializing in 100% Arabica specialty coffee, debuted in Ginza, drawing crowds through its unique fusion of food and experience.

Saint Laurent also expanded with a large flagship store in Omotesando, introducing 'Saint Laurent Rive Droite', a creative line aimed at merging art, music, and culture into the shopping experience. Van Cleef & Arpels created a new boutique in Ginza, featuring a first-of-its-kind facade design utilizing the Rosanjou pattern and including VIP rooms to showcase the brand's excellence.

These new venues are not merely retail points; they serve enhanced 'salon functions' that maximize customer stay time. Ground-level stores in prime urban locations are evolving from just selling products to becoming interactive hubs for customers, where brands can communicate their unique ethos and aesthetics.

Market Outlook

Retailers plan to continue their hybrid store designs that combine physical retail with VIP salons and food and beverage areas. Despite limited transactions in the upper rent levels in Ginza this term, the annual upper limits have increased by 10%, setting new record highs. The demand for flagship stores in tier 1 areas seems to have peaked, yet the presence of new development opportunities suggests potential for further rent increases.

The overall market remains vibrant, particularly in tier 2 areas, where interest from high-end brands, athleisure, and Korean retailers continues to be robust. Given the extremely limited availability of prime properties, rental rates are expected to follow an upward trend.

For a detailed analysis of the retail market, please refer to the full report available in PDF format on our website.

About Cushman & Wakefield

Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm listed on the New York Stock Exchange. With over 52,000 employees in approximately 400 offices across 60 countries, C&W delivers a comprehensive suite of services, including facility management, transaction advice, appraisal, tenant representation, leasing, and project management. The company’s projected revenue for 2024 stands at $9.4 billion. C&W's commitment to the principle of 'Better never settles' has cultivated an award-winning corporate culture recognized across the industry. For more information, please visit www.cushmanwakefield.com.