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Lease Office Market Trends in Tokyo the first half of 2014

Post: Thursday May 29, 2014

The vacancy rate is declining in the lease office market in Tokyo. Move-ins to new office buildings in Otemachi and Marunouchi areas have completed their first initial round up to optimal occupancy. Many companies still increasing their number of employees have started looking for new properties with larger office space in other areas.

 

Office Space in Tokyo 2014

 

 

The average vacancy rate in the end of March in the 5 wards of central Tokyo (Chiyoda, Chuo, Minato, Shinjuku, Shibuya) is 6.7%. This is the lowest level seen within the last 5 years and it is the ninth month of consecutive decline. Quite a few companies are unable to find vacancies in their desired area and are having to go to other areas or consider new buildings that are scheduled for completion later in 2015.

 

Recent trends show that companies that are looking for larger spaces are taking notice of the recently built buildings in the Shibaura area. Companies unable to find desired space within budget in Otemachi and Marunouchi go to Iidabashi, Shinbashi, and other areas in the Minato ward. The areas drawing attention recently for office property are the Nihonbashi-Muromachi and Kyobashi area. In the past there were many small and middle sized buildings in this area. But recently, new large scale office buildings have been completed, and the area has started to invite international companies and also large domestic companies.

 

The reasons for relocation tend to be more on the positive side. Expansion of business and increase of staff are some of the top reasons for recent new office leases. After Lehman's fall most companies had decreased their office space for cost cutting purposes, but now many companies expecting a recovering economy have increased employees and hence have become crowded in their current spaces.

 

Very few completions of new large scale office buildings during 2013-2014 also is pushing the low vacancy trends. In 2013, for the first time in 6 years the new aggregate demand of large scale office buildings in the 23 wards of Tokyo (990thousand sqr. meter) exceeded the new aggregate supply (580 thousand sqr. meter). Hence, large scale buildings scheduled for completion in 2014 already have relatively high occupancy rates.

 

Declining vacancy rates and positive reasons for the relocation of companies are pushing up rent prices. The rent price index of pre-existing office buildings (more than 1 year old) in Tokyo in the first half of 2014 shows the highest level of the past 4 years and half. Many companies are looking for the existing buildings with large office space and that has pushed up the rent prices. The average rent price offered in the 5 wards of central Tokyo is 16,325 Yen per 3.3 sqr. Meter; this has been increasing for 3 consecutive months.



オフィス グラフ

 

The trend shows that the rent went up in both pre-existing buildings and new buildings.

 

 

Research for Office Rent  2014/05/06NIKKEI Newspaper) 

Area Group

 

Rent

1000Yen

/Tsubo

Rent

(in 2013)

Deposit

1000Yen

/Tsubo

Marunouchi, Otemachi

New

4045

4055

480540

Exist.

2060

2360

200720

Kasumigaseki,

Uchisaiwaicho

New

Exist.

1537

1040

174444

Yotsuya, Kojimachi

New

1925

Exist.

730

830

38360

Yaesu, Kyobashi,

Nihonbashi

New

2235

2240

264420

Exist.

843

830

48516

Nihonbasi-Honcho,

Muromachi

New

Exist.

430

625

28360

Ginza

New

30

3335

360

Exist.

835

835

32420

Hachobori, Kayabacho

New

13

14

130

Exist.

621

723

30252

Tsukiji, Akashi-cho

New

20

200

Exist.

630

630

45360

Shinbashi,Nishi-Shinbashi,

Toranomon, Shiodome

New

2330

2327

276360

Exist.

738

738

35456

Akasaka,

Aoyama

New

2537

3540

300460

Exist.

840

740

32480

Roppongi, Azabu

New

3336

35

396432

Exist.

742

742

28504

Shiba, Mita, Takanawa

New

2325

2225

276300

Exist.

830

730

48360

Shibaura, Konan

New

2023

Exist.

535

630

35420

Osaki, Gotanda

New

2325

276300

Exist.

633

630

36360

Shibuya, Harajuku

New

35

Exist.

638

935

38456

* 1 Tsubo=3.3sqm

 

 

Article Lease Office Market 2014 Second Halfのコピー

 

 

 

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