Shinjuku office vacancy rate drops to 1% range

The office vacancy rate across Tokyo’s five central business districts of Chiyoda, Chuo, Minato, Shinjuku and Shibuya dropped to 3.22% in July, down 0.04 points from June and down 0.72 points from July 2016. This is close to the record low of of 3.03% reported in April 2008 and down from a high of 9.43% seen in June 2012.

The vacancy rate in existing buildings (excluding new construction) was 2.87% in July, down 0.74 points from last year.

In Shinjuku ward, the vacancy rate was 1.68%, down 0.06 points from the previous month and down 1.30 points from last year. The vacancy rate dropped to the 1% range in May 2017.

The average monthly rent was 18,916 Yen per Tsubo (approx. 5,723 Yen per square meter), up 3.5% from July 2016 and the 43rd month in a row to record a year-on-year increase in rent. With vacancy rates creeping lower and lower, rents for existing office space are seeing upwards pressure. In some districts, however, rents in certain buildings have reached a ceiling and there have been some instances of price reductions.

Nationwide, vacancy rates were down in all major cities except for Yokohama which has seen the vacancy rate increase by 0.48 points to 5.96% in July 2017.

Sources:
The Nikkei Shimbun, August 10, 2017.
Miki Shoji Office Report, July 2017.