realestate-tokyo.com

PLAZA HOMES

  • My Listings
  • 03-3583-6941
  • Email
  • OPEN EVERYDAY
  • Mon. - Sat. 9:00am - 8:00pm
  • Sun. & Holidays 9:00am - 6:00pm(JST)

Lease Office Market Trends in Tokyo the second half of 2015 Japanese of this page

Post: Wednesday November 11, 2015

Office relocation demand in Tokyo such as for consolidating offices dispersed in different places remain continuously at a high level. Overall, the decrease in the total office vacancies have become remarkable especially in the center of Tokyo. The vacancy rate in central Tokyo has fallen to 4.89% in July and the rate is continuing to decrease. This is the first time in six and a half years that the vacancy rate has fell below 5%. This important benchmark tends to be the percentage point where owners move towards raising their rents. In actuality, office rents have been going up for the past 21 consecutive months. An uptick in macro developments aimed at increasing the attractiveness of Tokyo as an international metropolis coming up to the 2020 Olympics are making their effects felt in the market.

Lease Office Markets Trends 2015 後半


According to the office rent survey by Nihon Keizai Shimbun, Inc., the index for rents of existing buildings (more than one year old) in Tokyo in the second half of 2015 has been exceeding the same period a year ago, making it 4 consecutive years of increase since 2012. The survey is made by calculating the office rent owners advertise to tenants based on an Office Rent Index of Feb.1985 as 100. Tokyo’s existing buildings are at 133.23, which is a 5.23 points rise from the same time the previous year, while it shows 157.33 on recently built office buildings less than 1 year old, which is 22.63 points rise from the same time a year ago. In the current market, in general, it is hard to secure large floor space and lease contracts for space in new buildings are done 1-2 years before their actual completion. The upward trend in rents are seen not only with new contracts, but also when renewing an existing contract, especially among the newer large sized buildings.

 

The average vacancy rate in the end of September in the 5 wards of central Tokyo (Chiyoda, Chuo, Minato, Shinjuku, and Shibuya) is 4.53%, which is a 1.12% decline from the same time the previous year. As the decrease of vacancy continues, tenant companies are finding it harder to find an office property in accordance with their desirable conditions, and more companies have had to compromise a bit on their ideals to secure their office spaces. The demand for office space is very high due to office space expansion and consolidations across all industries and company sizes. However, there are very few office properties with large floor space available and it is also hard to find small office space. The expansion of office space has not caught up with the speed of the increase in staff, and hence the office area allotted per staff as of April, 2015 in Tokyo's 23 wards is currently the smallest ever.

 

The office vacancy rate in central Tokyo such as Marunouchi, Otemachi and Nihonbashi is particularly low. According to a certain private survey the vacancy rate in Marunouchi and Otemachi area in 2015 is less than 2%. There is also another private survey result that the rent price at the time of contract renewal is going up by 5-10% in central Tokyo. While the demand to relocate suburban offices to central Tokyo increases, such demand tends to concentrate on office buildings that are relatively new and with high specs making the rent for these properties go up because there are very few such buildings left in the center of Tokyo. In the current situation, building owners remain confident and price their rents high. There are still vacant floors in the Tokyo Nihonbashi Tower (Chuo-ku, Tokyo) which was completed in April, and half of the office floors are still seen vacant in the Tekko Building (Chiyoda-ku, Tokyo) which was completed in the end of October. But even in such a situation, building owners are not impatient and remain confident with their policy not to compromise on the high rent price settings. This seems to be influenced by the expectation of further economic recovery and hence a continuing rent rise towards the Olympics in 2020.

 

There are some concerns in the market though. Looking closely at the actual situation of office rents, the remarkable price rises are limited only to the buildings with some favorable conditions, and there are many buildings where the situation is not so rosy. The current up-ward trend of rent prices is still slower than that of the second half of 2000 when the office rents also went up.

 

While the current lease office market seems to be positive, the monthly economic outlook which the government announced in October was lowered for the first time in one year. It has been pointed out that the slightly weak situation of the macro economy may influence sentiment of tenant companies and relocation demand may become duller. The Japanese domestic working population is expected to decrease, and inviting more overseas companies and foreign workers will be necessary in the near future. By using the opportunity of holding Olympic Games in 2020, Tokyo needs to continue appealing its improvement and attractiveness as an international city.

 

※ Reference source: 2015/11/4 NIKKEI Newspaper

 

 

 

Research for Office Rent(2015/11/4 NIKKEI Newspaper)

Area Group

 

Rent

1000Yen

/Tsubo

Rent in 20141000Yen

/Tsubo

Fluctuation

(%)

Deposit

(1000Yen

/Tsubo)

Comments

Marunouchi,

Otemachi

New

3850

380500

Few Vacancy, Continuous rise of rent

Exist.

2055

2350

3

200660

Kasumigaseki,

Uchisaiwaicho

New

Few supply of new buildings

, Decreased vacancy

among large scale buildings

Exist.

1740

1737

6

170480

Yotsuya,

Kojimachi,

Bancho

New

Large scale vacancies in existing buildings, more vacancies

Exist.

730

930

- 5

35360

Yaesu,

Kyobashi, Nihonbashi

New

2038

2140

- 5

200456

High rent prices for new buildings making it harder to fill vacancies

Exist.

1240

1043

- 2

99480

Nihonbashi

-Honcho,

-Muromachi

New

2530

Lowering the rent for new buildings have decreased vacancies

Exist.

330

627

28360

Ginza

New

2833

300372

Attention to the building planned for completion in 2017 at former Matsuzakaya location

Exist.

935

1037

- 6

80420

Hachobori, Kayabacho

New

20

A need to lower the rent to attract demand

Exist.

523

721

30240

Tsukiji,

Akashi-cho

New

Decreasing vacancy, but still many available spaces

Exist.

625

625

60300

Shinbashi, Nishi-shinbashi,

Toranomon, Shiodome

New

2533

2240

- 6

280360

Small and Mid-size properties newly built will face difficultie

Exist.

845

738

18

45540

Akasaka,

Aoyama

New

3338

2535

18

330380

Many buildings with full occupancy

Exist.

940

940

50480

Roppongi,

Azabu

New

Increase in large scale vacancies, but high demand and  stable rents continue

Exist.

945

742

10

60540

Shiba,

Mita,

Takanawa

New

2329

1825

21

230348

Vacancy get filled quickly

Exist.

930

730

5

60300

Shibaura,

Konan

New

2630

1525

40

260360

Still vacancy left in Shinagawa Season Terrace

Exist.

535

535

24420

Osaki,

Gotanda

New

2630

2325

17

270312

Almost full occupancy in the new buildings around the station

Exist.

630

630

36360

Shibuya, Harajuku

New

3540

350420

Almost full occupancy and overheating rent price

Exist.

1238

1033

16

46456

1 Tsubo=3.3sqm

 

 

 

Related Posts

This entry was posted in Rental Offce, Real Estate News, Market Info.

Categories

Tokyo Living Info. for Expats

Great range of expat-friendly rental apartments and houses in central Tokyo and its suburbs.

Tokyo Living Guide for Expats

Tokyo Area Guide

General descriptions of popular expat areas including photos and maps. 

Tokyo Area Information for Expats

Expat Housing in Tokyo

Great range of expat-friendly rental apartments and houses in central Tokyo and its suburbs.

Rental Apartments & Houses for Expats

Buying Properties in Tokyo

Everything you need to know to succeed in the Japanese Real Estate Market. For Residential & Investment.

Properties for Sale in Tokyo

Rental Apartment - Roppongi Hills

High-grade residential complex in Roppongi Hills. Full facilities and ample reception s...
Plan: 1 BR + 1 Bath - 4 BR + 3.5 Bath
Rent: JPY330,000 - JPY3,570,000

Roppongi Hills Residence

Calendar 2017のコピー
Cj バナー Englishのコピー
PLAZA HOMES Edited 4
Facebook SB