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Page 12 shows Action three, tenant replacement in retail.
As you may know, America Eagle Outfitters which was a tenant in Tokyu Plaza Omotesando Harajuku, closed the store at the end of December 2019.
The contract with AOYAMA TRADING Co., Ltd, the lessee, has been still in effect and will not expire immediately, but we have already started leasing activity aiming at early tenant replacement.
Tokyu Plaza Omotesando Harajuku is located at Jingumae crossing of Omotesando and Meiji Street, a center of fashion culture in Japan. Since its open in 2012, thanks to prevailing impact of SNS, power to attract attention and visitors has been growing in this area, and rent has also increased.
In Omotesando area, through redevelopment projects in Shibuya, number of people walking around is growing, and the area has been continuously attracting customers and consumption.
Because of its high visibility, the property often appears on medias, and for many tenants, this location serves a branding advertisement and it has high competitiveness which fulfills tenant needs as flagship stores.
As shown in the graph on the right, 7% rent increase through tenant replacements was achieved in the past, and based on these results including other cases in Urban Retail properties, we think that competitiveness of retail facilities in prime location is strong.
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