Executive summary
Roppongi, Shinjuku and Otemachi all sit on the short list of central business and lifestyle hubs in Tokyo. Yet from an investment perspective, they behave like three different markets.
- Roppongi behaves as a premium expat and nightlife market: high nominal rents, smaller liquidity pool, yields often compressed for prime stock.
- Shinjuku is a high-liquidity commuter and retail hub with a broad tenant base, strong rent depth and a wide spectrum of product from budget 1R to family 2LDK.
- Otemachi is a core business district with limited residential stock, strong corporate demand and pricing that can decouple from typical ward-level averages.
All GRM and yield ranges in this article are indicative, based on internal station-level benchmarks and recent listing behaviour. They are not valuations and should be treated as directional only.
Three hubs, three roles
At a city level, these three hubs sit in very different positions within the Tokyo ecosystem. Understanding their role is the first step before interpreting any GRM or yield metric.
Roppongi: lifestyle and expat cluster
Roppongi combines high-end residential towers, embassy presence and a dense cluster of nightlife, dining and retail. The rental market is heavily weighted toward:
- Singles and couples willing to trade size for location and amenities
- Foreign tenants and corporate leases in selected buildings
- Higher expectations for building quality, views and concierge-style services
This demand mix tends to support high nominal rents but also leads to pricing that can run ahead of fundamentals, particularly on smaller units and brand-name towers.
Shinjuku: commuter, retail and office node
Shinjuku is one of the most diversified hubs in Tokyo. It combines the world’s busiest railway station, office towers, extensive retail and a wide range of residential neighbourhoods spreading outwards.
The tenant base ranges from students and young workers in compact 1R and 1K units to families and long-term residents in 1LDK and 2LDK stock. This breadth creates strong rent depth and liquidity across price points.
Otemachi: institutional business core
Otemachi is primarily a business and financial district with limited residential stock. Where residential does exist, it often serves:
- Corporate leases and long-stay executives
- Tenants prioritising proximity to the Marunouchi and Otemachi office clusters
- Investors who accept lower yields in exchange for perceived security and prestige
Because supply is thin, headline prices can move with small changes in demand, and GRM can look structurally higher than in more balanced residential neighbourhoods.
GRM and yield behaviour
Looking only at ward-level averages would hide important differences between these stations. Using internal models, we can outline indicative GRM and yield ranges by typical layout.
Roppongi: premium GRM, selective yield
For older 1R and 1K stock within comfortable walking distance of the station, we often observe:
- Monthly GRM in the 130–170 range for compact units, depending on building quality and line-of-sight
- Net yields frequently compressed once renovation, vacancy and management costs are factored in, notably for trophy addresses
For investors, Roppongi tends to behave more like a capital preservation and optionality play rather than a pure yield engine, unless one moves into secondary streets or older buildings where pricing discipline is stronger.
Shinjuku: wide spectrum and strong depth
In Shinjuku, GRM ranges are wider but tend to reflect a more balanced mix of product:
- Older 1R/1K can sometimes be found with monthly GRM closer to the 110–140 range, particularly as walking distance increases beyond 8 minutes
- 1LDK and 2LDK units may show slightly higher GRM but often benefit from lower volatility and deeper tenant pools
For investors, Shinjuku offers more combinations of risk and return profiles, with better chances of finding assets that balance yield, liquidity and long-term rent resilience.
Otemachi: thin market, institutional pricing
Because residential stock is limited around Otemachi, observed GRM can sit structurally above more typical residential hubs:
- Compact units with strong corporate demand may trade at GRM levels that look high relative to their rent, especially when priced as quasi-institutional stock
- Yield can be acceptable in absolute terms but often trails what is achievable in more residentially oriented stations along the same lines
This is consistent with a market where pricing is driven as much by strategic location and corporate requirements as by pure rental fundamentals.
Layout mix and tenant segments
Layout mix is one of the most important, and often ignored, dimensions when comparing stations. Roppongi, Shinjuku and Otemachi attract different tenant archetypes.
Roppongi: compact premium stock
Roppongi’s rental stock has a higher concentration of compact, high-spec 1R and 1LDK units designed for singles and couples. Investor implications include:
- Dependence on a more mobile tenant base, including foreigners and project-based residents
- Higher sensitivity to shifts in expat budgets and corporate policies
- Potential upside when global interest in Tokyo’s lifestyle districts rises
Shinjuku: full cycle tenant base
Shinjuku’s broader layout mix supports a full tenant life cycle, from students and first-job renters to families and long-term residents. This matters for investors because:
- Vacancy risk can be diversified across several segments
- Rent growth may occur at different times across layouts, creating rotation opportunities
- The station remains relevant across demographics even as the city evolves, sustaining long-term liquidity
Otemachi: specialised demand
Where residential stock exists near Otemachi, layouts and product are typically designed around corporate usage and senior professionals.
This can stabilise occupancy but also concentrates risk in a narrower tenant universe and in corporate decision-making cycles, which must be reflected in underwriting assumptions.
How to use this comparison as an investor
The goal is not to declare one station “better” than another, but to show why investors must align their strategy with the structural role of each hub. A long-term income investor will evaluate Roppongi very differently from an investor seeking optionality or redevelopment upside.
In our advisory work, these station-level profiles are combined with property-level metrics from our internal tools, including:
- GRM by layout and age band
- Net yield after realistic operating assumptions
- Walk-time and slope sensitivity
- Historical rent depth and vacancy behaviour
For a deeper dive into how we construct benchmarks, you can read the article GRM Benchmarks by Layout or the station overview in Best Stations in Tokyo for Investment (2025 Edition).
Investor takeaways
- Roppongi, Shinjuku and Otemachi all sit in central Tokyo but serve different tenant universes and capital profiles.
- Roppongi is best approached as a selective, premium market where stock selection and underwriting discipline are critical.
- Shinjuku offers greater depth and more combinations of yield and risk, making it suitable for a broader range of strategies.
- Otemachi’s residential stock behaves more like a specialised institutional asset and should be analysed accordingly.
- Station-level profiling is more informative than ward averages when comparing these hubs.
Next step
If you are actively considering central Tokyo assets and want a station-level view tailored to your budget and risk profile, you can request a data-backed investor brief.