According to Miki Shoji, the commercial vacancy rates in Tokyo’s central 5 wards (Chiyoda, Chuo, Minato, Shinjuku and Shibuya) in August dropped 0.13 points from the previous month to 9.17%. The vacancy rate on brand new buildings dropped 3.48 points to 30.16%.
In Shinjuku-ku, the vacancy rate dropped 1.05 points to 10.85%, as large foreign financial corporations began to consolidate their various offices into one space. In Minato-ku, the rate increased by 0.48% to 10.10%. This was partly due to the completion of Ark Hills Sengokuyama Mori Tower. The 47 storey tower has a total floorspace of 43,423 tsubo (143,296 sqm).
The average rent in the 5 wards dropped by just 0.05% (approximately 8 Yen) to 16,733 Yen/tsubo per month (approximately 5,070 Yen/sqm/month). The average rent in brand new office buildings in August was 23,041 Yen/tsubo (6,982 Yen/sqm/month). As companies are moving in order to reduce office space costs, the rental market is transiting to a bearish one.
Average August rent by area:
- Chiyoda-ku: 18,152 Yen/tsubo (5,500 Yen/sqm)
- Chuo-ku: 15,976 Yen/tsubo (4,841 Yen/sqm)
- Minato-ku: 17,298 Yen/tsubo (5,241 Yen/sqm)
- Shinjuku-ku: 14,131 Yen/tsubo (4,282 Yen/sqm)
- Shibuya-ku: 17,148 Yen/tsubo (5,196 Yen/sqm)
The vacancy rate in the Osaka business district dropped 0.10 points to 9.91%, while Nagoya’s business district rose 0.15% to 11.25%.
Source: Miki Shoji Office Report Tokyo, September issue.