Tokyo office rents to peak in 2017?

A vacancy rate of 5% is said to be the line between a landlord’s market and a tenant’s market. According to Miki Shoji, the vacancy rate in Tokyo’s central five business districts in July 2015 was 4.89%, down 0.23 points from June and down 1.31 points from last year. Shibuya-ku has the lowest vacancy rate of 2.27%, down 1.82 points from last year. CBRE reported that the all-grade vacancy rate in July 2015 was 3.3% in the 5 wards and 3.6% across the 23 wards. During the mini-bubble in 2007, the vacancy rate across all wards dropped to just 1.2%, while monthly rents reached a peak of 52,350 Yen/Tsubo (15,863 Yen/sqm).

Marunouchi remains the prime office location, and Marunouchi’s landlord - Mitsubishi Estate - is currently enjoying a vacancy rate of just 1.8%.

With renewed confidence in the economy, vacancy rates have again improved, while office rents have increased to a current average of 33,600 Yen/Tsubo (10,181 Yen/sqm), up from 29,050 Yen/Tsubo (8,803 Yen/sqm) seen during the market bottom.

Demand from companies seeking to rent entire floors is thought to be a driving force behind the rising rents. Companies are starting to group divisions and departments into one building or one floor, rather than having various smaller office locations.Read more

by Zoe Ward

400m tall office tower for Tokyo Station area

Mitsubishi Estate is planning a 400 meter tall office building for an area just north of Tokyo Station. This is the largest development planned for the Otemachi/Marunouchi area, and when complete it will be the tallest building in Japan, exceeding the 300m tall Abeno Harukas in Osaka.

Mitsubishi is aiming to make the building an international centre for finance, and hope to attract both domestic and foreign financial institutions.Read more

by Zoe Ward

Shibuya Parco to be rebuilt

Shibuya Parco Redevelopment 2

The Shibuya Parco Store is going to be redeveloped as part of the Udagawacho 15 District Redevelopment Project.

The new building will be 29 storeys and 110 meters tall. It will contain retail space the first 8 floors, with rental office space on floors 9 and above. Construction will start in March 2017 with completion scheduled for late 2019.Read more

by Zoe Ward

Shibuya Ward Office demolition to start in November

Shibuya Ward Office Redevelopment 1

Demolition of the 51-year old Shibuya Ward Office and Public Hall buildings will start this November.  Discussions to redevelop the government offices began in early 2013 after a building inspection found that the ward office building did not meet minimum earthquake-resistant standards and was at risk of collapse in an earthquake with a shindo level of upper-6.

The Shibuya government office buildings include the 6-storey ward office and the 4-storey Shibuya Public Hall (Shibuya C.C. Lemon Hall). They were completed in 1964, and the Hall hosted the weight-lifting events for the ’64 Summer Olympics.

To help cover the costs of rebuilding, part of the government-owned land will be leased to Mitsui Fudosan Residential under a 70-year fixed term. Mitsui will construct a 143m tall, 39-storey residential tower. At the end of the lease, residents will vacate their apartments, the building will be demolished and the land will be returned to the local government.Read more

by Zoe Ward

Kenzo Tange building in Yamanashi to be retrofitted

Yamanashi Cultural Hall Kenzo Tange 3

The 49-year old Yamanashi Cultural Hall building in Kofu City is undergoing earthquake retrofitting which is expected to extend the building’s lifespan for another 50 years.

The 8-storey building was designed by modernist architect Kenzo Tange and competed in 1966. It is said to be one of Tange’s exemplary works and was selected by DOCOMOMO Japan as one of the top 100 modernist buildings in the country. The structure was designed to allow for future extensions, and the original floor area of 18,000 sqm was later expanded to 22,000 sqm.Read more

by Zoe Ward

Otemachi PAL Building demolition to begin in August

Otemachi PAL Building

As part of the Otemachi 1-2 District Redevelopment, Kajima Corporation will begin demolition of the Otemachi PAL Building next month. The PAL Building, along with the Otemachi 1 Chome Mitsui Building and the Mitsui Bussan Building are all being demolished to make way for two new office towers which are due for completion between 2019 ~ 2021. The owners of the buildings, Mitsui Bussan and Mitsui Fudosan, are expected to contribute around 170 billion Yen (1.37 billion USD) towards the redevelopment.

The Otemachi PAL Building is a 9-storey building with a total floor area of 27,923 sqm. It was built by Takenaka Corporation and completed in 1961. Mitsui Bussan and Mitsui Fudosan acquired the building from consumer credit company Promise in 2011 for 72 billion Yen (approx. 900 million USD at the time).  After the sale, Promise leased the office space until they moved into the SMBC Consumer Finance headquarters in Ginza in late 2013.Read more

by Zoe Ward

Political power spot in Chiyoda to be rebuilt

Hirakawacho Sabo Kaikan Building 1

The building that once housed the head office of Japan’s Liberal Democratic Party (LDP) is going to be demolished and rebuilt starting next year. In recent years the 58-year old building has become increasingly worn out.  The decision to rebuild was made after an inspection in 2014 found that the structure did not meet current earthquake-resistant standards.

A new building design will be selected in September and demolition will begin from April 2016. The new building is expected to be 7-storeys and should be completed sometime in 2018.Read more

by Zoe Ward