In November, the office vacancy rate in Tokyo improved for the first time in 21 months as concerns over the pandemic’s effects on the workplace seem to have weakened.
According to brokerage Miki Shoji, the average vacancy rate across Tokyo’s five business districts of Chiyoda, Chuo, Minato, Shinjuku and Shibuya was 6.35% in November, down 0.12 points from the previous month but up 2.02 points from last year. Vacancy rates improved everywhere but Chuo (+0.17 points) and Chiyoda (no change).
The average monthly office rent dropped 0.6% from the previous month to 20,686 Yen per tsubo (approx. 6,259 Yen/sqm). Office rents are down 6.9% from last year.
With the most recent State of Emergency ending in late September, companies have started to wind back telework and more employees are expected to return to the office. Corporations that continued to see strong sales results amidst the pandemic have boosted staff numbers and expanded their office footprint.
However, other viewpoints suggest that a full-fledged recovery of the office market may not be imminent. A number of new office towers to be completed in central Tokyo in the coming years may continue to oversupply the market.
Sources:
Miki Shoji, December 9, 2021.
The Yomiuri Shimbun, December 9, 2021.
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