The area around Shibuya Station is currently undergoing a large-scale redevelopment project that is said to occur once every 100 years. New landmarks are emerging one after another, significantly transforming the city's landscape and functionality. This transformation is influencing the office market, the attractiveness of commercial facilities, and residential needs, directly impacting the value trends of surrounding real estate. This article provides an overview of the latest developments in major redevelopment projects currently underway or planned around Shibuya Station, analyzes the resulting market changes and future trends in land prices and rents, examines opportunities and risks for real estate investors, and explores the long-term potential of the Shibuya area.
Since the 2000s, large-scale redevelopment has been promoted in conjunction with the undergrounding of railways and the reorganization of station functions around Shibuya Station. As a result, numerous large-scale mixed-use buildings have been constructed since the 2010s, transforming the cityscape. First, we will organize the major projects completed in recent years and the development plans scheduled for the future in chronological order.
Conceptual image of the planned “Dogenzaka 2-chome South Area” (high-rise and mid-rise buildings). The existing Shibuya Scramble Square East Building is visible in the background, and Shibuya Mark City is visible in the foreground. The redevelopment will connect Mark City and the new building via a deck.
As described above, the area around Shibuya Station already has numerous facilities that have been completed and others scheduled for completion in the coming years. In the “First Stage” of the 2010s, large-scale buildings such as Hikarie and the East Wing of Scramble Square, directly connected to the station, were constructed. In the “Second Stage” of the late 2020s, further development is planned to include surrounding areas such as Sakuragaoka, Dogenzaka, and Miyamasuzaka. While these redevelopment projects will dramatically expand and enhance the city's capacity, the overall mix of land use will also diversify. In the next chapter, we will examine how these developments are changing the office market and commercial and residential demand in the Shibuya Station area.
Recent redevelopment has increased the supply of high-grade office space in Shibuya, driving tenant demand, particularly among IT and creative companies. In fact, the newly constructed offices that were massively supplied in 2023 were steadily filled by 2024, and the overall office vacancy rate in Shibuya Ward rose to 4.38% in February 2024 before improving and declining to 2.60% by the end of the year (a decrease of 1.37 percentage points compared to the same month of the previous year). While concerns arose about a temporary increase in vacancies due to the prolonged remote work trend post-pandemic, 2024 saw a return to in-office work, leading to a series of expansions and relocations aimed at “promoting face-to-face communication” and “securing top talent.” In particular, Shibuya Ward (especially around Shibuya Station) saw significant vacancy absorption and rent recovery, driven by strong demand from IT companies and global firms.
In terms of rents, the average asking rent per square meter in Shibuya Ward (monthly) stood at 32,164 yen as of the end of 2024, marking an increase of 2,585 yen compared to the previous year, surpassing the average for the five central wards of Tokyo. While it has not yet reached the level of over 40,000 yen per square meter in Chiyoda Ward (Otemachi and Marunouchi areas), Shibuya has become one of the highest-rent areas in Tokyo, alongside Minato Ward and Shinjuku Ward. In newly constructed high-grade buildings, some transactions have been concluded at levels ranging from the latter half of the 30,000 yen per tsubo range to the 40,000 yen per tsubo range. This suggests that Shibuya's office market has evolved from its traditional role as a “low-cost office hub for startups” to a “high-value-added office hub attracting large corporations.”
That said, the impact of increased supply was not entirely absent. Between 2020 and 2023, large-scale office buildings such as Scramble Square, Sakura Stage, and Dougenzaka-dori were completed in Shibuya, leading to a temporary rise in vacancy rates and a period of rent adjustment. However, as mentioned earlier, strong demand and smooth absorption have brought vacancy rates back to appropriate levels (around 3%). Many newly constructed buildings are operating at high occupancy rates, and the mix of companies headquartered in Shibuya is diverse, ranging from startups to major foreign IT companies like Google and Meta, as well as emerging financial firms. With the redevelopment enhancing both the quality and quantity of the office market, Shibuya is expected to continue its popularity as a “city where people want to work” and a “city where companies want to establish their headquarters.”
Shibuya is often associated with youth culture and trends, giving it the image of a commercial hub. However, it has historically had a relatively limited number of commercial facilities compared to other secondary urban centers. Sakai, the head of Shibuya Development at Tokyu Fudosan, points out that “in terms of sales, Shibuya's commercial revenue is only half that of Ikebukuro and less than a third of Shinjuku.” Shibuya's narrow, basin-like terrain makes it difficult to increase the number of large stores, resulting in a crowded landscape dominated by a limited number of commercial facilities such as Tokyu Department Store, Parco, and 109 (Marukyu). As a result, recent redevelopment efforts have focused on “scrap and build” approaches to update commercial floor space, rather than explosively increasing commercial area, and there is no perception of oversupply.
In fact, there is a view that commercial space in the Shibuya area is insufficient, and new facilities supplied through redevelopment have consistently high tenant demand. Newly opened commercial facilities such as Shibuya Scramble Square, Shibuya Parco (reopened in 2019), Miyashita Park, Sakura Stage, and Akushu all feature high-profile shops, restaurants, and experiential content, demonstrating strong visitor attraction. For example, the commercial zone of Shibuya Sakura Stage, which opened in July 2024, saw a 43% increase in the number of pedestrians in the surrounding area immediately after opening, and has been reported as a new tourist spot in Shibuya. Shibuya Akushu also features unique tenants, including some opening their first stores in Japan, and is significantly changing the flow of people in the east exit area.
Additionally, the recovery of inbound (visitor) demand is further boosting Shibuya's commercial market. Shibuya Scramble Crossing and Hachiko Square remain popular spots for overseas tourists, and the number of foreign visitors to Shibuya has surged following the resumption of tourism post-COVID-19. The observation facility “Shibuya Sky” has gained popularity as an Instagram-worthy spot, while the official Nintendo and Pokémon shops within Shibuya Parco attract daily queues. Retail sales in the central Shibuya area are also returning to pre-pandemic levels, with commercial rents remaining stable or showing an upward trend (a survey indicates that rental rates for new tenants have increased by several percent year-on-year in some areas).
As described above, Shibuya, which has seen its commercial infrastructure expanded and refreshed through redevelopment, has evolved into a city that can meet a wider range of consumer needs. However, as Sakai also points out, there are major challenges such as the “fusion of real and virtual” and the “shift from product consumption to experience consumption.” Shibuya has the ability to attract people who want to experience something new, but to meet these expectations, it will be necessary to continue improving the quality of its commercial spaces. Developers in the Shibuya area have indicated that they will continue to focus on creating commercial spaces that emphasize experiential value, suggesting that Shibuya's commercial potential still has significant room for growth.
Traditionally, the area around Shibuya Station has been primarily an office and commercial district with few residents. However, in recent years, the growing demand for urban living and improved convenience have led to an increase in the number of people choosing Shibuya as a residential area. Residential uses are also being incorporated into redevelopment projects, such as the B block of Shibuya Sakura Stage (Shibuya SAKURA Tower, etc.), which includes residential functions such as condominiums and service apartments. As one of the few opportunities to achieve a work-life balance near Shibuya Station, it is attracting attention despite its high price range.
Additionally, in the Sakuragaoka and Shibuya 2-chome areas, plans are underway to build high-end rental residences alongside ultra-high-rise office buildings. In Block C of the Shibuya 2-chome West Area Redevelopment Project, a 41-story residential building is planned, with hundreds of new residential units expected to be supplied in the future. This will create a large-scale residential space unprecedented in the Shibuya Station walking area, and upon completion, it has the potential to attract new residents such as affluent individuals and highly specialized foreign professionals.
Looking at Shibuya Ward as a whole, the population is growing steadily due to the trend of people returning to the city center, and the average income level is among the highest in the 23 wards of Tokyo. Shibuya Ward, which includes high-end residential areas such as Ebisu, Hiroo, and Daikanyama, has always been an area with high demand for housing, but in recent years, the area around Shibuya Station has also begun to attract people as a place to live. With redevelopment, the station square and parks are being renovated, improving safety, comfort, and disaster resilience, thereby enhancing the quality of the living environment. For example, a large underground plaza and pedestrian deck have been constructed at the east exit of Shibuya Station, ensuring barrier-free access for strollers and wheelchairs. The abundance of convenient facilities (commercial, medical, administrative services, etc.) around the station also makes it easier to conduct daily life.
Overall, Shibuya is evolving from a “city for work and play” to a “city for work, play, and living.” However, there are also challenges. Due to limited supply of residential properties, rent and price levels remain extremely high, making it difficult for the average family to live there comfortably. The average price of new apartments in Shibuya Ward is among the highest in Tokyo, and rental prices for one-room apartments typically range from around 100,000 to 200,000 yen per month. Therefore, for the time being, the main residents will likely be affluent singles, DINKs, and foreign executives. However, if the housing stock increases in the future and the 24-hour activation of the city progresses, Shibuya may one day earn a spot on the list of “most desirable places to live.”
The value of the Shibuya area has increased significantly due to large-scale redevelopment, which is also reflected in land prices and rental rates. The average published land price in Shibuya Ward in 2025 is expected to rise by 12.53% year-on-year, reaching the third-highest level nationwide. The increase around Shibuya Station is particularly notable, with the average land price in the Shibuya Station area reaching 9,186,666 yen per square meter (approximately 30.36 million yen per tsubo), marking a year-on-year increase of 13.88%. For example, the published land price for Udagawa-cho 23-3 (in front of the QFRONT Building) near the Shibuya Scramble Crossing has reached 33.5 million yen per square meter (approximately 110.74 million yen per tsubo), making it one of the most expensive commercial areas in the country. This surge in land prices reflects expectations for redevelopment and optimistic future revenue prospects.
In terms of rent, in addition to the aforementioned upward trend in office rents, commercial rents (street-level store rents) are also on the rise due to recovery from the pandemic and the resurgence of inbound tourism. In bustling areas such as Center Street and Park Street, there are cases where asking rents have exceeded pre-financial crisis levels. According to statistics from a major real estate service company, the average asking rent in the seven major wards of Tokyo (Chiyoda, Chuo, Minato, Shinjuku, Shibuya, Shinagawa, and Toshima) stood at 29,250 yen per square meter as of the end of 2024, marking five consecutive months of increases. In Shibuya Ward alone, the average rent has remained above the city center average, with the completion of redevelopment projects enhancing the area's appeal and driving up tenants' willingness to pay higher rents.
Looking ahead, land prices and rents around Shibuya Station are expected to remain firm. Although there will be an increase in supply due to redevelopment, the potential on the demand side is even higher, and a virtuous cycle is emerging in which the completion of each project boosts the area's ability to attract people and industries. However, the rapid pace of increase seen in 2022-2023 is likely to gradually slow down, and the rate of increase is expected to become more moderate. Land prices in Shibuya have already reached a fairly high level, and if changes in the financial environment occur (such as pressure on real estate yields due to rising interest rates), temporary price adjustments may occur. Additionally, around 2027, when new supply reaches its peak, there is a risk that office rents may stabilize or decline slightly due to a balance between supply and demand. However, in the long term, the brand value and scarcity of Shibuya as a city remain unchanged, and there is still room for urban growth. Overall, it is reasonable to view the outlook as “a short-term adjustment phase followed by a sustained upward trend in value in the medium to long term.”
The redevelopment boom around Shibuya Station presents both significant opportunities and potential risks from a real estate investment perspective. Here, we summarize the key points that investors should keep in mind.
Finally, we will evaluate the potential of the Shibuya area from a long-term perspective. In conclusion, Shibuya is expected to maintain and enhance its high potential as one of Tokyo's most vibrant areas in the future. The following points support this conclusion.
First, Shibuya is home to a concentration of elements that are leading the way in the era, such as youth culture, the IT industry, and the creative industry. With the redevelopment of the area, the hardware (infrastructure, office space, etc.) has been improved, creating a fertile ground for synergies between the software (culture, human resources) and the hardware. Shibuya will continue to be a hotbed for innovation as the “Bit Valley” for startups, and the attraction of global companies to establish their Japanese headquarters in the area will also progress. This dynamic economic activity underpins the city's value.
Second, the existence of the “Greater SHIBUYA 2.0” strategy led by the Tokyu Group. This new urban development strategy, formulated in 2021, outlines plans to realize “a city life unique to Shibuya” by integrating the three elements of “working, playing, and living” and supporting them with digital and sustainable policies. This initiative, which goes beyond isolated development projects to create a grand design for the entire city as a single living and economic zone, is at the forefront of urban development in Japan. As a result, Shibuya is positioned as an “unfinished project” that will continue to evolve, with a long-term growth story. The clarity of the city's vision for urban management is itself a strength that makes it an attractive investment destination.
Third, infrastructure improvements are enhancing the city's connectivity and overall completeness. The east-west passageway and underground plaza at Shibuya Station, as well as the new bus terminal, have dramatically improved traffic flow and convenience. Once a labyrinthine and confusing hub, Shibuya Station will be reborn as a comfortable terminal with smooth transfers between major lines once redevelopment is complete. Additionally, environmental improvements along the Shibuya River and strengthened disaster prevention infrastructure are addressing safety and security concerns. These enhancements to the urban infrastructure are crucial factors that will support property values in the long term.
Finally, Shibuya's unique brand power and recognition will remain unmatched. Globally, “SHIBUYA” is recognized as a symbol of Tokyo, making it an attractive location for both tourists and businesses. As a hub of youth culture that constantly renews itself, Shibuya never ages as a city. This brand asset is the source of real estate value and a strength that cannot be easily replicated.
In summary, the area around Shibuya Station is expected to maintain its high potential and appeal as a real estate investment target in the long term. However, as mentioned earlier, flexibility to adapt to changes in the market and society is essential. Fortunately, Shibuya is a city that excels at “continuous change.” Related companies and the government are also aware of this, and the city as a whole has a system in place to embrace evolution. For investors, taking a medium- to long-term stance and getting involved in the Shibuya area to ride its growth story could bring significant returns.
The redevelopment around Shibuya Station is having a major impact not only on the shape of the city but also on the real estate market. We have examined the progress of major projects and the resulting changes in office, commercial, and residential demand, as well as trends in land prices and rents. Overall, it can be said that Shibuya is an area that will continue to evolve and increase in value. For real estate investors, Shibuya's transformation presents an opportunity, but caution is also required due to the high price levels. However, the city's growth potential, backed by a clear vision, remains attractive, and with the right perspective and strategy, investors can reap substantial rewards.
As we gaze upon the ever-changing streets of Shibuya, we can sense the steady growth of real estate value beneath our feet. In a few years, when the “once-in-a-century redevelopment” is complete, what kind of face will Shibuya present? As investors, it is crucial to continue updating our knowledge with the latest information and deepening our insights while envisioning the future of this dynamic area.