Office vacancy rates in Tokyo down for 18th consecutive month

According to Miki Shoji’s office report, the office vacancy rate in Tokyo’s five central business districts (Chiyoda, Chuo, Minato, Shinjuku and Shibuya) was 5.47% in December 2014, down 0.08 points from the previous month and down 1.87 points from last year. This is the 18th month in a row to see a month-on-month decrease in vacancy rates.

In Minato-ku, vacancy rates dropped to the 5% range for the first time since January 2009.

The vacancy rate in brand new office buildings was 13.40%, down 0.33 points from the previous month and down 1.10 points from last year. Only one office building was completed in December and was fully leased at the time of completion.

A survey of 2,627 leading office buildings in Tokyo’s business districts found that 65% of them were operating at 100% occupancy in December, up 5.81 points from the previous year. Approximately half of the buildings completed in 2014 were also fully leased.

In 2015, the supply of brand new office space is expected to be approximately 800,000 sqm, down 4% from 2014 and down almost 50% from 2012. The supply of new floor space in Minato-ku is expected to drop by 23.4% from last year, while Chuo-ku may see a 21.9% drop. Shinjuku-ku is the only district with no new floor space expected in 2015.

20 buildings are expected to be completed, down from 29 buildings in 2014. 6 of those are large-scale buildings with floor areas over 33,000 sqm.

Vacancy rates in Tokyo:

  • Chiyoda-ku: 5.61% (+0.14 points from the previous month; -0.52 points from last year)
  • Chuo-ku: 5.62% (-0.12 points; -1.48 points)
  • Minato-ku: 5.96% (-0.12 points; -2.36 points)
  • Shinjuku-ku: 5.26% (-0.07 points; -4.02 points)
  • Shibuya-ku: 3.16% (-0.62 points; -2.37 points)

Nationwide vacancy rates:

  • Tokyo: 5.27% (-0.08 points from the previous month; -1.87 points from last year)
  • Osaka: 7.92% (-0.09 points; -1.87 points)
  • Nagoya: 7.53% (+0.03 points; -2.11 points)
  • Sapporo: 7.78% (-0.11 points; -0.90 points)
  • Sendai: 11.06% (-0.11 points; -0.97 points)
  • Yokohama: 8.38% (-0.29 points; -0.45 points)
  • Fukuoka: 7.70% (-0.13 points; -3.16 points)

AVERAGE OFFICE RENT

The average monthly office rent in Tokyo’s five business districts was 16,953 Yen per Tsubo* (5,137 Yen/sqm) in December, up 3 Yen from the previous month and up 746 Yen (4.6%) from last year. This is the 12th month in a row to see a month-on-month increase.

The average monthly rent in brand new office buildings was 26,973 Yen/Tsubo (8,173 Yen/sqm), showing no change from the previous month, but down 193 Yen (0.7%) from last year.

Average monthly office rent in Tokyo:

  • Chiyoda-ku: 18,445 Yen/Tsubo (-87 Yen from the previous month; +759 Yen from last year)
  • Chuo-ku: 16,240 Yen/Tsubo (+97 Yen; +924 Yen)
  • Minato-ku: 17,259 Yen/Tsubo (+26 Yen; +495 Yen)
  • Shinjuku-ku: 14,206 Yen/Tsubo (+1 Yen; +649 Yen)
  • Shibuya-ku: 18,105 Yen/Tsubo (-59 Yen; +1,107 Yen)

Average monthly office rent across Japan:

  • Tokyo: 16,953 Yen/Tsubo (+3 Yen from the previous month; +746 Yen from last year)
  • Osaka: 11,123 Yen/Tsubo (+3 Yen; -148 Yen)
  • Nagoya: 10,742 Yen/Tsubo (-18 Yen; -86 Yen)
  • Sapporo: 8,189 Yen/Tsubo (-7 Yen; +34 Yen)
  • Sendai: 9,103 Yen/Tsubo (+5 Yen; -14 Yen)
  • Yokohama: 10,422 Yen/Tsubo (-17 Yen; -131 Yen)
  • Fukuoka: 9,207 Yen/Tsubo (+5 Yen; -33 Yen)

*1 Tsubo = approximately 3.3 sqm or 35 sqft.

Source: Miki Shoji, January 9, 2015.

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