Omotesando office/retail buildings sold to domestic buyer
Two buildings alongside Omotesando’s Kotto-dori Street have been sold to a Kobe-based realtor.Read more
Partner sought for Toranomon redevelopment project
The semi-governmental Urban Renaissance Agency is seeking a partner for a large-scale redevelopment project in Toranomon.Read more
Shinagawa data center to sell for 70 billion Yen
Sekisui House Reit has sold the trust beneficiary interest in the Gotenyama SH Building for 70 billion Yen (US$517 million), a 36% premium over what it was acquired for in 2014. The sale price exceeded its appraisal value by 13%.Read more
Tokyo's office vacancy rate improves 0.3 points in April
Tokyo’s office vacancy rate in April was 6.11%, a 0.3 point improvement from the previous month and a 0.27 point improvement from last year. The office leasing market is showing signs of recovery, and some companies are seeking to expand their office space.Read more
Record high number of listed companies dispose of real estate in 2022
Of the 3,803 TSE listed companies, 114 reported the sale of real estate assets in the 2022 fiscal year, according to Tokyo Shoko Research. This is the highest number seen since 2007. In the late 1990s and early 2000s, the typical annual number ranged from 150 to 230 companies.
Omotesando retail flipped again
The Almost Blue retail building in Minami Aoyama has changed hands for the 3rd time in as many years.Read more
Komatsu to redevelop Akasaka HQ
On April 4, Komatsu announced plans to redevelop its headquarters in Akasaka, Tokyo.Read more
Omotesando office building reaches completion
Mitsubishi Estate and Y.K. Goko completed construction of the 3rd MINAMI AOYAMA office building on March 16.
Construction starts on new Yaesu building
On March 13, Daibiru began construction of a new commercial building in Yaesu. This forms part of the real estate company’s Design100 Project Phase-II which is aimed at maintaining and strengthening the competitiveness of existing assets. In this case, the previous Yaesu Dai Building that stood on this site was demolished. It had been designed by famed architect Togo Murano and completed in 1967.Read more
Tokyo's annual office supply forecast for 2023 - 2026
With the completion of several large-scale office buildings later this year, the total supply of new office space to hit the market in 2023 is going to be more than double what it was in 2022.
XYMAX Corporation’s research institute is forecasting a supply of 224,000 tsubo (740,000 sqm or 7.9 million sq.ft) of new office space this year. It is still below the peak of 275,000 tsubo supplied in 2020.
Between now and 2026, 75% of the office supply will centered in Chiyoda, Chuo and Minato, aka central Tokyo’s 3 wards. Adding in Shinjuku and Shibuya brings the total share to 86%. The average annual supply over the past 10 years has been around 159,000 tsubo. It is expected to drop to an average of 158,000 tsubo from 2023 to 2026.
Work styles have changed since the onset of the pandemic, and tenants are now favoring buildings that offer a variety of amenities, such as communal lounges and private booths for online meetings. These features are typically not found in older office buildings. Landlords are also mixing up the floor sizes on offer by splitting up some floors to attract small-to-mid sized corporate tenants.
And while the odds of completely leasing out a new building prior to completion may be lower, developers are taking this into account and allowing more time to fill their buildings with the right mix of tenants.
The phenomenon of secondary vacancies, where older buildings see increasing vacancies as the tenants move into newer ones, is starting to become apparent outside of the central 5 wards, with a growing divide between the high-demand buildings in prime locations, and the older, hard-to-fill buildings in second-tier locations.
Sources:
The Tokyo Shimbun, March 14, 2023.
Xymax, January 18, 2023.