Tokyo Property Investment: Comparative Yield Analysis by Ward

The rental yield landscape in Tokyo presents a complex picture with significant variations across different wards and property types. Here's a detailed analysis of the current situation.

Overall Market Overview

The average rental yield in Tokyo is generally lower compared to other Japanese cities, primarily due to high property prices. As of 2024, the expected yield (期待利回り) for residential properties in Tokyo's southern districts is approximately 3.8%.

Yield Distribution Across Tokyo

High-Yield Areas

• Adachi Ward
• Katsushika Ward
• Edogawa Ward
  These wards consistently show yields exceeding 5%.

Low-Yield Areas

• Minato Ward
• Shibuya Ward
  These areas typically show yields below 3.5%.

Geographic Patterns

The yield distribution follows a clear geographic pattern:

• Northern (城北) and Eastern (城東) areas: Higher yields
• Southern (城南) and Western (城西) areas: Lower yields

Property Type Analysis

One-Room Apartments

• Tokyo Southern District: 3.8% expected yield
• Other major cities: 4.4-5.0%

Family-Type Apartments

• Average yield: 4.0-4.1%
• Slightly higher than one-room apartments in some areas

Investment Considerations

Minimum Yield Thresholds

• Urban areas: 8% (surface yield)
• Suburban areas: 9% (surface yield)

Surface vs. Actual Yields

• Surface Yield (表面利回り): Generally 8% for apartment buildings
• Actual Yield (実質利回り): 5-8% after expenses

Market Trends

Recent data shows:

• Overall declining yield trend
• Rising property prices
• Stable rental demand in central areas

Geographic Yield Comparison

Area	Expected Yield
Tokyo Southern District	3.8%
Yokohama	4.4%
Nagoya	4.4%
Osaka	4.2%
Fukuoka	4.5%

Ward-by-Ward Yield Comparison

Ward Name	Average Yield	Property Price Range (¥/m²)	Distance from Tokyo Station	Key Features
Adachi	5.2-6.0%	450,000-650,000	12-20 km	High yield potential, Growing infrastructure,Lower entry costs
Katsushika	5.0-5.8%	400,000-600,000	15-20 km	Strong rental demand, Good transportation links, Affordable prices
Edogawa	4.8-5.5%	450,000-700,000	12-18 km	Riverside locations, Family-friendly, Developing areas
Itabashi	4.5-5.2%	500,000-750,000	10-15 km	University presence, Mixed residential/commercial, Stable tenant pool
Nerima	4.3-5.0%	550,000-800,000	12-17 km	Suburban character, Good schools, Green spaces
Setagaya	3.8-4.5%	800,000-1,200,000	8-15 km	Upscale residential, Premium locations, Strong appreciation potential
Meguro	3.5-4.2%	1,000,000-1,500,000	6-10 km	High-end properties, International community, Luxury market
Shibuya	3.2-3.8%	1,200,000-2,000,000	4-8 km	Prime central location, High property values, Strong capital growth
Minato	3.0-3.6%	1,500,000-2,500,000	2-6 km	Premium market, International tenants, Prestigious addresses
Chiyoda	2.8-3.5%	1,800,000-3,000,000	0-2 km	Central business district, Ultra-luxury properties, Limited availability

Note: Yields and prices are indicative ranges based on market data. Individual properties may vary significantly based on specific location, condition, and property characteristics.

Investment Recommendations

For optimal investment returns:

• Consider properties with minimum 5% yield in central Tokyo
• Look for 8% or higher in suburban areas
• Factor in property age and location relative to stations

Market Outlook

The Tokyo rental market shows:

• Stable demand in central areas
• Recovering population inflow
• Continued strength in apartment rental rates

This analysis reveals that while Tokyo's rental yields are generally lower than other Japanese cities, certain wards and property types can still offer attractive returns for investors. The key is understanding the geographic and property-type variations that influence yield potential.