With office vacancy rates in the 2% range, commercial tenants in Kyoto are reporting difficulty in finding new office space as the city’s supply of office buildings dwindles.

This year, parts of Higashiyama, Nakagyo and Shimogyo saw rosenka land values increase by over 20%. Rising land values are being supported by the city’s booming tourist industry which is causing real estate companies and hoteliers to aggressively seek sites to develop hotels and high-end apartments. With a scarce supply of vacant sites, office buildings are being torn down and replaced with hotels, shrinking office inventory.

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