Japan’s supply of new office space hits lowest level since 1980

According to the Japan Real Estate Institute, 1.35 million square meters (approx. 14.5 million sq ft) of new office space was supplied across the country in 2016, down 25% from 2016 and the lowest level seen since 1980. 84% of the new supply was centered in Tokyo’s 23 wards.

Sapporo, Sendai, Saitama, Kyoto and Kobe saw no new office buildings supplied last year, although there are several new buildings planned for completion over the next two years. Kyoto City, however, has no new office supply planned for the near future. Kyoto is reportedly suffering from a severe shortage of office space with office brokerage Miki Shoji reporting a current office vacancy rate around 2%, down from 12% seen in 2010.

Nationwide, a total of 96 buildings containing 930,000 sqm of floor space were demolished in 2016.

26% of the total office stock in Japan is in buildings that were built to the older earthquake codes (pre-1981). Fukuoka City has the highest share with 40% of office buildings over 36 years old. Sapporo City has a ratio of 39% and Osaka City has a ratio of 32%. The ratio in Tokyo is 23%.

In Tokyo, 120 new office buildings containing 4.04 million sqm of floor space are planned for completion between 2017 and 2019.

New office buildings planned for Tokyo:

2017

  • Otemachi Park Building: A 150m tall tower overlooking the Imperial Palace. The total floor area is 150,000 sqm. It includes the Ascot Marunouchi Tokyo serviced apartments on the upper floors.
  • Akasaka Intercity Air: A 205m tall tower with over 82,000 sqm of leasable office space. The main tenant is Saison Information Systems.
  • Jingumae Tower Building: A 115m tall office building with a total floor area of 43,000 sqm. It is located right at the end of Harajuku’s Takeshita-dori shopping street.

2018

  • Tokyo Midtown Hibiya: A 191m tall redevelopment project located across the street from Hibiya Park. The building has a total floor area of 188,000 sqm and includes retail, cinemas and office space.
  • Otemachi 2 Chome District: Two towers of 178m and 163m with a total floor area of 350,000 sqm. Sumitomo Corporation is reportedly relocating their Tokyo head office from Harumi to this building in 2018.
  • Marunouchi 3-2 Project: A 150m tall office tower located directly opposite the Imperial Palace moat. The building will have a total floor area of 173,000 sqm. It has replaced 3 older buildings.

2019

  • Toranomon 2-10 Project: The redevelopment of the Hotel Okura Tokyo.  The project includes two towers of 188m and 85m and a total floor area of 183,000 sqm.
  • Toranomon Hills Business Tower: A 183m tall office tower with a total leasable area of 94,000 sqm. It is located directly across the street from Toranomon Hills’s northern side.
  • Shibuya Station District East Tower: A 230m tall tower designed by SANAA and Kengo Kuma and Associates. The building, which is located above Shibuya Station, will have a total floor area of 174,000 sqm.
  • Nihonbashi Muromachi 3 Chome A District Building: A 26-storey office building located behind the Bank of Japan. The building, which has been designed by Pelli Clarke Pelli Architects will have a total floor area of 168,000 sqm.

 

Sources:
Japan Real Estate Institute, September 13, 2017.
The Kyoto Shimbun, July 3, 2017.
Nikkei Business Publications, April 19, 2016.
Mori Trust Press Release, April 18, 2017.