When Japan opened up to the world after 200 years of isolation, Yokohama was designated as an open port and subsequently grew from a small fishing village into a bustling centre of international trade and commerce by the 1868, the beginning of the Meiji Period. Through Yokohama, Japan saw the introduction of modern science and technology, including its first railroad, as well as foreign culture.

The city has since remained Japan’s busiest port but lost some of its lustre during the post-war economic boom, becoming a satellite town for commuters to Tokyo. Today, however, Yokohama is reaping the benefits of long-term infrastructure investment and is rated a desirable place to live.

The Minato Mirai 21 Development Project, a 186-hectare land reclamation and infrastructure project, was conceived as a means of regaining the city’s status as a commercial and cultural centre. Since construction began in 1983, 76 hectares of land has been developed and the area now hosts more than 1,800 companies and 100,000 employees.

Indeed, Yokohama has largely reclaimed its historic status and companies are increasingly drawn to the area. Minato Mirai is also developing a niche as a research hub, with major electronics firms such as LG and Murata Manufacturing occupying R&D facilities in the district.

The Yokohama station area is the city’s central shopping district, as well as its primary transport hub, with several rail and subway lines servicing more than two million passengers daily. This area has ranked at the top of the most desirable places to live in the Kanto Region according to surveys by Suumo and Lifull Homes – not surprising given the local amenities, convenient railway access, and affordability. The new normal after the COVID-19 pandemic will see demands for a better work and life balance, which should make Yokohama even more popular.

From an investment perspective, the multifamily sector in Yokohama remains stable and rents notably showed as much resilience as Tokyo following the Global Financial Crisis. The office market is still in a nascent phase and has yet to be truly tested: a number of developments will be coming online over the next few years, though many office projects are owner-occupied. In the short-term the market may be a tad bumpy nonetheless.

Taking a longer-term view, as Yokohama’s business district continues to develop, more people – and companies – should find the area to be an attractive alternative to the pricier districts of Tokyo. Larger developments, including the possibility of an integrated resort, may bring further vibrancy to the area.

Further reading:
Savills Japan Investment Report