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Lease Office Market Trends in Tokyo 2012

Post: Tuesday April 2, 2013   Author : plazahomes

The lease office market in Tokyo is on a track to recovery. Many new large scale office buildings were completed in the first half of the year 2012 – though recent trends show the relocation of companies picking up and hence the rate of vacancy decreasing. Popular new buildings are aggressively setting their prices at the high end while existing buildings are struggling to maintain their presence and have kept their prices lower.

 

The average vacancy rate of office buildings in the 5 wards of central Tokyo (Chiyoda, Chuo, Minato, Shinjuku, Shibuya) in the end of September was 8.90%. This was the first time in 10 months that the rate dropped below the 9% mark. Many were relocations involving the consolidation of multiple separate offices, but relocations due to business expansion were also apparent.

 

Popular properties are centrally located new buildings, or renovated buildings with high grade specs and facilities.

 

The rents for high grade office properties in central Tokyo have started to rise again from June. The biggest factor being that after the Great East Japan Earthquake, the criteria for office buildings focused much more on safety and disaster protection, and properties with these specs commanded a high price. For example, the rent for Roppongi Hills in Minato-Ku is up close to 40,000Yen per 3.3 sqm (1 tsubo). There were some new office buildings that achieved full occupancy before completion this year. Relocations from major corporations keen on safety measures and disaster protection have helped boost the demand for new high grade office buildings.

 

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There are more buildings that renovate the interior design and update facilities like the air conditioning system and power supplies. By renovation, even buildings 30 years or older which usually have 20-30cm lower ceilings can still compete with new buildings. However still, most existing building owners cannot afford to renovate their properties so need to make their prices attractive in order to compete. This factor is causing the average market prices to remain relatively low.

 

In 2013, the new supply of large scale office buildings will decline significantly, and in Tokyo it is forecasted to be down 70% from 2012. This forecast suggests that the decline in new supply might lead to a more competitive market, and hence to higher prices.

 

 

Average Office Rental Prices2012/12/19NIKKEI Newspaper

 

Area Group

 

Rent1000Yen/Tsubo

Rent

(in 2011)

Deposit1000Yen/Tsubo

Marunouchi, Otemachi

New

40 – 50

 

480 – 600

Exist.

22 – 60

21 – 50

148 – 720

Kasumigaseki,

Uchisaiwaicho

New

25

 

Exist.

11 – 40

11 – 35

112 – 480

Yotsuya, Kojimachi

New

20 – 21

13 – 25

240 – 252

Exist.

8 – 28

6 – 35

38 – 336

Yaesu, Kyobashi,

Nihonbashi

New

23 – 28

250 – 336

Exist.

8 – 31

8 – 30

45 – 372

Nihonbasi-Honcho,

Muromachi

New

Exist.

6 – 20

7 – 27

42 – 240

Ginza

New

18 – 30

Exist.

10 – 35

10 – 35

64 – 420

Hachobori, Kayabacho

New

Exist.

5 – 20

5 – 18

30 – 240

Tukiji, Akashi-cho

New

Exist.

6 – 25

6 – 21

36 – 300

Shinbashi,

Nishi-Shinbashi,

Toranomon, Shiodome

New

35

15 – 25

420

Exist.

8 – 32

7 – 33

56 – 420

Akasaka, Aoyama

New

25 – 30

20 – 30

250 – 360

Exist.

6 – 36

8 – 33

24 – 432

Roppongi, Azabu

New

29

35

348

Exist.

7 – 38

8 – 40

28 – 456

Shiba, Mita, Takanawa

New

22 – 25

264 – 300

Exist.

7 – 30

5 – 28

42 – 360

Shibaura, Konan

New

20 – 23

240 – 276

Exist.

6 -30

7 – 27

35 – 360

Osaki, Gotanda

New

30

Exist.

6 – 30

7 – 19

36 – 360

Shibuya, Harajuku

New

35 – 40

25

420 – 480

Exist.

9 – 30

8 – 29

45 – 360

* 1 Tsubo=3.3sqm

This entry was posted in Rental Offce

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