TOKYO -- Rental rates are going up in Osaka's business district as retailers open more stores to accommodate an influx of foreign visitors.
The estimated June contract rate for 200 sq. meters of floor space on the first floor of a building in the Shinsaibashi area in central Osaka was 300,000 yen ($2,900) per 3.3 sq. meters, according to real estate services company CBRE. That represents a 25% increase from three months earlier and a 50% jump from the prior year.
The Japan Tourism Agency says that the number of foreign travelers to Japan shot up 19% year on year in the April-June period, reaching 5.96 million.
Low-cost carriers, many of which fly in and out of airports in the Osaka area, account for a larger percentage of international flights than in the Tokyo area, making it convenient for foreigners to travel to Japan. At Osaka International Airport, low-cost carriers account for 33.3% of international flights during the summer period from late March through late October, a 3.5-point rise from a year earlier.
The increase in demand from foreign visitors has prompted drugstores to open more locations in Osaka's shopping district. Tsuruha Holdings is opening one new store after another in Osaka's Chuo Ward, with an increase in store visitors driving up sales despite a dip in per-customer spending. Cocokara Fine has added more duty-free shops and has seen cosmetics sales in particular shoot up. The yen's strength, coupled with China raising duties on luxury goods brought in from overseas, has spurred demand for daily necessities among visitors to Japan.
In contrast to Osaka, lease rates in Tokyo's Ginza district, which had climbed at a faster rate than Osaka's, remained unchanged for the fourth straight quarter at 400,000 yen per 3.3 sq. meters.