Office vacancy rates in July 2014 - Miki Shoji
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 6.20% in July, down 0.25 points from the previous month and down 2.09 points from last year. This is the lowest level seen since March 2009 when vacancy rates were 6.05%.
The vacancy rate in brand new buildings was 17.41%, down 0.68 points from the previous month but up 4.69 points from last year.
The following office buildings were completed in July:
- Mercros Building, Nihonbashi, Chuo-ku: 9 floors; 6,980 sqm floorspace.
- Tamachi Front Building, Shiba, Minato-ku: 9 floors; 5,730 sqm floorspace.
- PMO Shiba Koen, Minato-ku: 8 floors; 3,500 sqm floorspace.
New apartment prices in greater Tokyo at 22-year high
According to the Real Estate Economic Institute, 4,222 brand new apartments were released for sale in greater Tokyo in July, up 20.5% from the previous month but down 20.4% from last year. This is the 6th month in a row to see a year-on-year decline in supply. Developers are taking caution to limit supply amidst a drop in demand following the increase in consumption tax and a steep rise in construction costs. According to Nomura Securities, the average cost of construction in May 2014 was 187,000 Yen/sqm - the highest level seen since 1993.
3,532 apartments were sold, making the contract rate 83.6%. This is 7.1 points higher than the previous month and 2.1 points higher than last year.
The average new apartment price was 55,320,000 Yen, up 14.5% from the previous month and up 7.9% from last year. This is the first time that prices have exceeded 55 million Yen since November 1992.
The average price per square meter was 771,000 Yen, up 12.9% from the previous month and up 6.1% from last year.
1,533 apartments in 18 high-rise buildings (over 20-storeys) were offered for sale, up 241% from the previous month but down 1.8% from last year. The contract rate was 93.5%.
Approximately 2,500 new apartments are expected to be released for sale in August. The institute has revised its estimated downwards and now expects between 46,000 ~ 48,000 apartments to be supplied in 2014. Read more
Ken Corp plans to demolish Yokohama’s oldest warehouse
A local outcry has erupted after it was discovered that Minato-ku based real estate and expat leasing company, Ken Corporation, is considering demolishing the 104-year old Former Mitsui Bussan Yokohama Warehouse in Nihonodori, Yokohama.
The warehouse is one of the earliest structures in Japan to incorporate reinforced concrete in the construction. Built in 1910, the building has three floors as well as a basement and a total floor area of 2,194 sqm. It was designed by Oto Endo (1866-1943), a pioneer in designing RC buildings. He also designed the neighbouring Mitsui Bussan Yokohama Office Building (c1911), the Yokohama No. 2 Joint Government Office Building (c1926) and the Yokohama Teisan Office Building (c1926). The Mitsui Bussan Yokohama Office Building was the first building in Japan to be completely built out of reinforced concrete.Read more
Residential yields and vacancy rates in Minato-ku - August 2014
According to real estate listing site Homes, the average gross yield on an apartment in Minato-ku in August was 5.3%, up 0.1 points from last month but down 0.4 points from August 2013. The average gross yield across Tokyo was 7.0%, down 0.1 points from last month and down 1.1 points from last year.
The vacancy rate remains unchanged at 9.9% in Minato-ku and 11.0% across Tokyo.
The average asking price of a secondhand apartment in Minato-ku was 792,143 Yen/sqm as of August 1, up 0.79% from last month. The average asking price for land was 1,276,970 Yen/sqm, up 2.1% from last month.Read more
Suginami-ku may soon have powers to forcibly widen roads
The local government in Suginami-ku, Tokyo, is considering amending local regulations which would give them the powers to carry out the road widening and street levelling on privately owned setback land. If the plans are approved, this would be the first local government in Japan to have these legal powers.
Approximately 30% of the roads in Suginami are less than 4 meters wide and pose a hazard to the local community in the event of a disaster, such as an earthquake, as emergency vehicles cannot navigate the narrow roads and lane ways.
Under the Building Standards Act, owners of buildings that front onto a road less than 4m wide are required to shorten their block land in order to widen the road when the building is redeveloped.
Suginami’s local government currently provide financial assistance to help owners with the cost of removing any obstacles such as walls and gates in order to complete the required setback. Although landowners are required to make the setback portion of land level with the road, many owners leave the raised curbing as is with garden beds and other objects still blocking vehicle access.