Japan - August 2020

S P OT L I G H T
Savills Research

Ikebukuro©ESR LTD

Ikebukuro

Post-COVID potential
for a diamond in the rough• Located in Tokyo’s Toshima
Ward, Ikebukuro Station is thesecond busiest railway hub in theworld, hosting eight train lines
and recording around 2.7 million
passengers each day.
•T
 oshima Ward is rebuffing
expectations of population
decline and Ikebukuro isredefining its image as both abusiness and residential hub.
•R
 etail activity in the submarket
has been largely concentrated
amongst department stores
integrated within the stationand owned by railway
operators. However, new,mixed-use developments andentertainment complexes are
drawing large footfalls outsideof the station.
• Ikebukuro is home to anumber of institutions ofhigher education and a newinternational campus is in thepipeline. Notwithstanding theimmediate impacts of COVID-19,
demand for compact housing
and student accommodation
should increase over the mid-tolong term.
• New offices in the area offer a
40% discount over comparable
properties in Shibuya. Given
its affordability and robust
railway access, Ikebukuro should
become a popular target forsatellite offices in the “newnormal”.

INTRODUCTION
Along with Shinjuku and Shibuya, the Toshima
Ward is known as one of the “Fukutoshin”(subcentres) of the Tokyo 23 wards (23W).
The ward is home to Ikebukuro Station,
which hosts eight train lines and on averagesees roughly 2.7 million passengers board or
disembark every day, making it the secondbusiest station in the world – surpassed only by
Shinjuku (Graph 1). The area serves as a hub for
those coming to central Tokyo from Saitama
and Northwestern Tokyo, and provides strong
access to Shinjuku, Shibuya, and Yokohama
via the Fukutoshin Line and Shonan Shinjuku
Line. While Toshima may not be as eminent
as its Fukutoshin compatriots, Ikebukuro isundergoing large-scale development that is
improving the area’s character.
To be sure, Ikebukuro is not as prominent
as Yokohama and Shinagawa, the othertwo submarkets surveyed in our “Tokyo
Periphery” report series. In 2014, a reportpublished by the Japan Policy Council
labelled Toshima as the only ward of the
23W with the potential to “vanish”, basedon a projected decline in the 20-39 year
old female population. While some havedisputed the accuracy of the assertion, theward’s administration has taken this report
seriously. As a result, they have been actively
introducing measures to avoid Toshima’s
projected fate by making the ward more
attractive to families. In addition, thenational government designated the areaaround Ikebukuro Station as a National
Strategic Special Zone1 and a Special Urgent
1 The “National Strategic Special Zones” are designated by thenational government to boost the international
competitiveness of industry and to promote the creation ofcentres of international economic activities by giving priority
to advancing structural reform of the economic system.

Urban Renewal District 2 in 2015.
A potential shift to satellite offices could
make Ikebukuro a winner going forward, witharound 1 million commuters passing throughthe station each day from Saitama Prefecturealone. At present, the area offers a relatively
limited amount of office space and what little
space there is tends to be in older, lowergrade offices. Encouragingly, the few officeprojects that have come online recently havebeen fully filled out – a sign of latent demandfor offices in the area. Upcoming mixed-use
developments and the area’s affordability,with the newest offices still offering asignificant discount to many older offices incentral Tokyo, should draw more corporate
tenants to the submarket.
A LONG-AWAITED MAKEOVER
A lack of suitable parks and green spaces wasamong the top issues identified regarding
Toshima’s ability to attract families. As such,the recent redevelopment of local parks should
serve to improve the area’s image and draw
residents. For instance, after being closed
down for six years, Minami-Ikebukuro Parkwas renewed in 2016 and has since become
a popular rest and relaxation spot for local
families, equipped with an open-style café
(Map 1, (E)), (cover image).
Revitalisation of Ikebukuro West Gate
Park, a location that – via a TV drama bearing
the same name – gained some notoriety asa hub for “yankee” (delinquent youth), was
2 The Act on Special Measures Concerning Urban
Reconstruction established a zoning category called “Special
Urban Renaissance Districts” that is highly flexible and freefrom restrictions of conventional city planning (e.g. use
districts) within urgent redevelopment areas.

Graph 1: Top 10 Stations by Average Daily Footfall (Tokyo Metropolitan Area),
FY20184,000,000
AVERAGE DAILY PASSENGERS

Summary

3,500,000
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0

Source Ministry of Land, Infrastructure, Transport and Tourism (MLIT), Savills Research & Consultancy
Note: The data above refers to passengers that have boarded or disembarked from the respective station.
As such, through traffic is not included.

savills.co.jp/research2

Ikebukuro

completed in the fall of last year as a partof the extensive West Gate Redevelopment
Project (Map 1, (5)). As a further boon
to the area’s image, Toshima was also
selected as Japan’s “2019 Culture City of
East Asia”, a distinction that has also been
held by cultural centres such as Kyoto andKanazawa.
Ikebukuro is also seeing a long-awaited
boom in office development and has been
attracting more attention as a business hub.
In January 2019, WeWork opened its first
Tokyo location outside of Tokyo’s central
five wards (C5W) in the Metropolitan
Plaza Building (Map 1, (C)), which was
subsequently followed by a locationencompassing 2,400 tsubo across five floors
at Hareza Tower (Map 1, (3)). Daiya Gate
Ikebukuro, completed in March 2019, offers
15 office floors with around 640 tsubo of
leasable area per floor (Map 1, (E)). Regus,
meanwhile, opened its second Ikebukuro
location on the 5th floor of the building in
April 2019.

Ikebukuro is a late bloomer in thecurrent cycle, undergoing large-scale
redevelopment for the first time in
40 years. This may be well-timed
as, with nearly 3 million commuters
passing through the station on a daily
basis, the surrounding area could bea prime location for satellite offices.
The redevelopment of the former site of the city
municipal office, now called the Hareza project,
was completed in May 2020 with a 20,000 tsubo
retail and office tower, as well as separate theatre
and public halls, while a new set of bridges, named
the “East-West Deck”, will connect the eastern andwestern sides of the station, improving the area’s
overall connectivity (Map 1, (4)). Looking further
ahead, the Higashi-Ikebukuro 1-Chome Project,consisting of a mixed-use 180 metre tower that has
a total GFA of 44,000 tsubo, is scheduled to open
its doors in 2024.

MAP 1: Ikebukuro Station Area

7

3
ii
A

i

v

5

2

4

iii

iv

Ikebukuro
Station

B

C
4
6

E

Higashi-Ikebukuro
Station

1

D
8

NEW DEVELOPMENTS

TYPE

COMP.

1

Daiya Gate Ikebukuro

Office2019

2

Q Plaza

Retail2019

3

Hareza Project

Mixed-use

2020

4

East-West Deck

Infrastructure

TBD

5

Ikebukuro West Gate Project

Mixed-use

Ongoing

6

TIU International Campus

Education

2023

7

Higashi-Ikebukuro 1-Chome

Mixed-use

2024

8

Minami-Ikebukuro 2-Chome

Residential

2025

LANDMARKSEST.

RETAIL HOTSPOTSA

Rikkyo University

1874

i

AnimateB

Sunshine City

1978

ii

Marui

C

Metropolitan Plaza Building

1994

iii

Otome Road

D

Brillia Tower Ikebukuro

2015

iv

Sunshine 60 Street

E

Minami Ikebukuro Park

2016

v

Yamada Denki

Source Savills Research & Consultancy

3

Ikebukuro

though its primary draw has been fashion
stores along Sunshine 60 Street (Map 1 (iv))
and Meiji Street, which fronts Ikebukuro
Station. That said, openings amongst apparelcompanies have been few as of late, withnew developments increasingly focused onentertainment, arts, and culture. 2019 saw theaddition of Q Plaza in July, a retail facility that
includes the first movie theatre in East Japan
offering IMAX® with Laser (Map 1, (2)). The
first through seventh floors of Hareza Tower
offer additional retail facilities including a
Toho Cinemas location that offers 10 screensand 1,700 seats, whilst the other buildings in
the development include a theatre and civic
hall.
Ikebukuro is also developing a niche
in anime and gaming subculture, gaining
ground on Akihabara (Chiyoda), Japan’s
top geek haven. LFS Ikebukuro, the largest

RETAILAs Tokyo’s number two transit hub, Ikebukuro
Station sees a vast amount of footfall.
However, much of the area’s retail activity
has been absorbed by large department
store chains owned by major rail companies,
including Seibu, Tobu, and Lumine (JR),all of which are directly attached to thestation. The Seibu location, for instance, isthe chain’s flagship store, recording sales of
JPY180 billion in 2019 – the third highest of
all department stores in Japan. As a result,
there is comparatively low spillover to thesurrounding area and most retail activity
has been concentrated in the zone between
Ikebukuro Station and Sunshine City (Map 1,(B)). New developments and cultural trends
may be shifting this balance, however.
The east side of Ikebukuro Station
offers a diverse array of retail facilities,

Graph 2: Ikebukuro vs Tokyo Prime* Retail Rents, 2008 to 2019

JPY / TSUBO / MONTHTokyo Prime Premium (RHS)
Ikebukuro - Non-1F
Tokyo Prime - Non-1F

Ikebukuro - 1F
Tokyo Prime - 1F

60,00060%

50,00050%

40,00040%

30,00030%

20,00020%

10,00010%

00%
1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H2008 2009 201020112012 2013 2014 2015 2016 2017 2018 2019

Source Japan Real Estate Institute, Savills Research & Consultancy*Tokyo Prime refers the average rents of the Ginza, Omotesando, Shinjuku and Shibuya submarkets.

Graph 3: Toshima Ward Residential rents, Q1/2014 to Q2/2020
Toshima

C5W Average

23W Average

Ex-C5W Average

17,000JPY / TSUBO / MONTH

16,00015,00014,00013,00012,00011,00010,000Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2014

2015

2016

2017

2018

2019

2020

Source Savills Research & Consultancy

savills.co.jp/research4E-sports centre in the 23W, was opened in
April 2018, adding to the area’s status asa hub for gamers. This has been further
complemented by the opening of Namco
Ikebukuro (a chain of arcades) in late 2019.
The area notably contains the flagship storeof Animate, the largest retailer of anime,
video games, and comics in Japan (Map 1,(i)). In contrast to the male-oriented imageof Akihabara, Ikebukuro is distinguishingitself as a haven for female anime fansspecifically. This subculture is centeredaround Otome Road, which literallytranslates as “Maiden’s Road”, a street infront of Sunshine City that hosts branchesof major comic stores including K-books,
Lashinbang, and Mandarake, all of whichcater more strongly to a female audience(Map 1, (iii)).
With an emphasis on entertainment andsupported by these niche segments, footfalls
are steadily being drawn beyond the station,
supporting robust rental growth in themarket (Graph 2). The southern portionof the East-West deck is also scheduled forcompletion this year, which will support
traffic between the two halves of thesubmarket. This diffusion in activity should
create more opportunities for investors,
who have generally had little room to buy
into the now densely-packed retail cluster.
To be sure, high-street retail will likely takea hit in the short run. As in Tokyo’s prime
retail submarkets, inbound tourists havebeen an important driver of sales. That said,
Ikebukuro caters heavily to a cohort of young
local shoppers, which may be a key support
through the duration of the pandemic andbeyond.
RESIDENTIAL
Despite the Toshima Ward’s 2014 designation
as the only ward of the 23W with the potential
to “vanish”, Ikebukuro was ranked as thethird most desirable area to live amongresidents of Greater Tokyo in that same year,
according to a survey by Suumo - Japan’slargest apartment search platform - coming
in behind Kichijoji (Musashino City) andEbisu (Shibuya). Though dropping somewhat
in recent overall rankings, Ikebukuro wasstill ranked at number three among residentsof Tokyo Prefecture in Suumo’s 2018 survey.
The area’s affordability and convenient accessmake it an attractive location for single
workers or college students, with asking rents
around 17% lower than the C5W average as of
Q2/2020 (Graph 3).
Indeed, more so than a business district,Toshima, along with neighbouring
Bunkyo, has been well known as a host to
institutions of higher education, including
Rikkyo University (Map 1, (A)), Gakushuin
University, Taisho University, and theTokyo College of Music. Adding to these
institutions, Tokyo International University
is aiming to open a new campus in Ikebukuroin 2023, where it intends to base 3,500

Ikebukuro

Graph 4: Toshima Ward Population Growth*, 2014 to 2020
Female (20 - 39)

Total (All Ages and Sexes)

Forecast Population
295,000

52,000290,000

50,000285,000

48,000280,000

46,000275,000

44,000270,000

42,000265,000

40,000TOTAL POPULATION (ALL AGES AND SEXES)PEOPLE (20 - 39 AGE GROUP)

Male (20 - 39)
54,000260,000
2014

2015

2017

2016

2018

2019

2020

Source Toshima Municipal Government, Savills Research & Consultancy*The population figures are as of 1 January of the respective year.

Map 2: Train Lines with Direct Connection to Ikebukuro
Train Lines
JR Saikyo

Daily Passengers< 10,000
1,000,000

JR Shonan Shinjuku

2,000,000

JR Yamanote
Metro Fukutoshin

3,000,000
3,600,000

Metro Marunouchi

Kawagoe
Daily Passengers: 203,225

Metro Yurakucho
Seibu Ikebukuro
Tobu Tojo

Omiya
Daily Passengers: 716,285

Tokorozawa
Daily Passengers: 102,732

Ikebukuro
Shinjuku
Shibuya

Wako City
Daily Passengers: 176,577

AkabaneDaily Passengers: 187,068

Kotake-mukaihara
Daily Passengers: 319,389

NerimaDaily Passengers: 211,236

Ikebukuro

Shinjuku

Source MLIT, Savills Research & Consultancy
Note: Lines represent segments connecting stations on a given railway line and are not fully representative of
actual railway routes.

5

students (Map 1, (6)). Notwithstanding
the immediate impacts of COVID-19,
demand for compact housing and student
accommodation in the ward should increaseover the long term as a result of student
demand.
While young, single residents may be thecore demand driver for Toshima housing,recent redevelopments, including those ofgreen spaces discussed above, should make thearea more attractive to families as well. 2015 saw
the addition of a first in Japanese real estate: aresidential tower combined with a municipal
office. The 49F residential tower, dubbed Brillia
Tower Ikebukuro, offers 432 condo units, mostof which are family sized. Demand during
the initial sales period was reportedly robust
enough to warrant a lottery system and units
sold out within only two months (Map 1 (D)). It
has recently been disclosed that, immediately
adjacent to Brillia Tower, a consortium led by
Sumitomo Realty & Development is planninga massive redevelopment project consisting of
two large-scale residential towers offering 1,500
units, which is slated for completion in 2025
(Map 1 (8)).
The local government has also implemented
measures to attract families, including a “childrearing navigator” at the municipal office,which reportedly had 5,300 users during its
implementation in FY2015. If such measurescontinue to be successful, the 2014 predictionof the ward’s disappearance is unlikely to cometo fruition. Encouragingly, current estimates
reveal that the female population in the 20-39
age group has been on the rise since that initial
forecast, whilst the ward’s total population
has also grown more than expected overthe same period (Graph 4). New residential
developments, such as Sumitomo Realty’s
large-scale project, should continue to draw
more families to the area.
It is also important to note that the
government’s population forecasts do notfactor in immigration. As of 2020, residents
with foreign nationalities account for 10% ofToshima Ward’s population and the number
has been growing. Given this, as well as theupcoming residential developments, it would
be reasonable, therefore, to conclude that theactual population growth in the ward will
outperform forecasts.
OFFICE
Even with the second busiest rail stationin the world, Ikebukuro carries a much more
prominent image as a retail and entertainment
district than as a business district. Indeed,
the Ikebukuro office market has seen few
significant additions since the completion ofSunshine 60 in 1978, which – with a GFA of
73,000 tsubo and standing at 240 metres – wasthe tallest building in Japan at the time. Data
from MLIT as of 2017 shows that Toshima
Ward had the oldest office stock amongst the23W, averaging 33 years old – 6 years older than
the average for the C5W – with 45% of officefloor area completed before 1979. Accordingly,Ikebukuro

recent and upcoming redevelopment projects, which
generally include significant office components,
should help Ikebukuro establish itself as a business
district.
Daiya Gate Ikebukuro was the first major
station-side office project since the completionof the Metropolitan Plaza Building in 1994, and is
the first in a series of office developments coming
online across the submarket over the next few
years. These developments are a much-needed
catalyst for Ikebukuro’s office market and should
carry overall market rents higher. According
to Sanko Estate, rents for large-scale offices3
in the Higashi-Ikebukuro / Minami-Ikebukuro
submarket stood at JPY24,000 as of June 2020.
Hareza Tower is rumoured to have opened its
doors fully leased in July at an average onefloor rent of over JPY30,000 per tsubo – a 25%
premium on average rents in the surroundingarea, but still 40% cheaper than the newest officebuildings in Shibuya. The west side of Ikebukuro
Station has even more of a discount, with Sanko
reporting rents of JPY20,000 per tsubo per monthfor large-scale offices – mainly due to the age ofthe buildings in the area. The Ikebukuro West
Gate Development project is expected to bringnew office space online over the coming years,
breathing new life into the submarket.
3 “Large-scale offices” refers to office buildings offering floor
plates of 200 tsubo (661 sq m) or greater.

Given its affordability compared to the C5W
and its connection to eight train lines, Ikebukuro
is a strong target for satellite offices or relocations
for tenants looking to cut rental costs. Firms thathave a substantial employee base in Saitama and/or Northwest Tokyo should find the area to be
especially appealing (Map 2). JR East reports that
750,000 passengers utilise the JR Saikyo Linebetween Akabane (Kita Ward) and Ikebukuro
stations alone on a daily basis.

in Tokyo, and pricing tends to be firm near thestation. However, with most sellers maintaining
pre-COVID pricing levels in prime markets,
Ikebukuro could still offer a comparative bargain
for those looking to deploy capital. The area
should have greater upside potential compared
to its counterparts in Tokyo’s CBD, given thesubmarket’s relatively late development phaseand positioning within the post-COVID work
environment.

OUTLOOK
Ikebukuro’s redevelopment is occurring muchlater than other sections of Tokyo in the current
cycle. Growing demand for satellite offices should
support Ikebukuro as a business hub, while
cultural trends and improvement of the area’s
image should support retail activity and boost
residency. Development over the past few decades
has favoured the east side of Ikebukuro Station
and, though this area remains the primary focusof redevelopment, the west side of the station isundergoing a long-awaited makeover. This, alongwith improved connectivity with the east side of
the station, should reduce the value gap between
East and West Ikebukuro and unlock more
attractive investments.
To be sure, investment opportunities are still
limited around Ikebukuro. The submarket has
one of the most compact retail and office clusters

For more information about this report, please contact us
Savills Japan

Savills Research

Christian Mancini
CEO, Asia Pacific(Ex. Greater China)+81 3 6777 5150
cmancini@savills.co.jp

Tetsuya Kaneko
Director, Head of Research& Consultancy, Japan+81 3 6777 5192
tkaneko@savills.co.jp

Matthew D’Elia
Manager, Research &Consultancy, Japan+81 3 6777 5179
mdelia@savills.co.jp

Simon Smith
Senior Director
Asia Pacific+852 2842 4573
ssmith@savills.com.hk

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