Despite the turbulence in the residential market segment, office buildings are in shortage

The vacancy rate is historically low in almost two decades since January 2002.

The vacancy rate of office buildings  in May in the five central wards, Tokyo (business districts, Chiyoda, Chuo, Minato, Shinjuku, Shibuya)

was announced recently by office building brokerage firm Miki Shoji in Tokyo.

The vacancy rate dropped by 0.06 points to 1.64%. 

Vacancy rate is the lowest since 2002.

Office buildings in central Tokyo continue to have very few vacancies.

The vacancy rate for new buildings was 0.33 points higher than the previous month, 3.13%, and the pre-owned buildings were 0.07 points, down 1.59%.

The new buildings which were completed in May are almost full.

The termination of the contract of existing buildings has continued to be low.

The large-scale buildings which were completed in five central wards of Tokyo in 2019 will have tenants.

The main office of Hotel Okura Tokyo will be rebuilt, and the Tokyo Headquarters of Sekisui Chemical Co., Ltd.

will move into the “Okura Prestige Tower” which will be completed in June.

The average rent in the five central wards of Tokyo increased by 0.55% (117 yen) to ¥ 21,396 per 3.3 square meters.

The rise is 65 consecutive months.

The newly built building is ¥ 31,405, which is 0.32% (¥ 100) higher.

 

(Vacancy rate between 2009 and 2019, Chart from Nikkei)

NIKKEI ARTICLE

Final thought

Despite the slightly defensive movement of the residential market in a last few months, demand in the office buildings is likely to remain firm.

(Please see the following article for the latest development in the residential market segment)

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Toshihiko Yamamoto
Real estate investing consultant and author.
Founder of Yamamoto Property Advisory in Tokyo.
International property Investment consultant and licensed
real estate broker (Japan).
He serves the foreign companies and individuals to buy and sell
the real estates in Japan as well as own homes.
He holds a Bachelor’s degree in Economics from
Osaka Prefecture University in Japan
and an MBA from Bond University in Australia

Toshihiko’s book, “The Savvy Foreign Investor’s Guide to Japanese Properties: How to Expertly Buy, Manage and Sell Real Estate in Japan”is now out on Amazon, iBooks (iTunes, Apple) and Google Play.
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