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Tokyo Office Space Market Index Q4 2014
Vacancy Rate | New Contract Rent Index | Contract Rent DI | Free Rent

Overall market is on a moderate recovery but increasingly polarized between winners and losers depending on how well office spaces meet the needs of tenants seeking to move for positive purposes.

Xymax Real Estate Institute releases the fourth quarter 2014 results of the office space market indices: Vacancy Rate, New Contract Rent Index, Contract Rent DI, Ratio of Free Rent Granted and Average Free Rent (Month).

Indices were released separately before but are combined into one report since the previous quarter to help a better understanding of the market. The vacancy rent data is a new addition in this quarter.

Market Conditions

Tokyo 23 Wards office space market is gradually recovering; vacancy rates down, rents up and free rents down on the back of strong office demand and limited new supply.

The market is increasingly more polarized between buildings: those that meet the needs of good-performing companies who are seeking to relocate their offices for the purposes of achieving better location, space expansion and/or upgrades have reduced vacant spaces and increased rents while those that failed to meet such needs have decreased rents.

Market Trends in Tokyo 23 Wards based on Indices

  • ・Vacancy Rate is 5.73%.
    A quarter-on-quarter decrease of 0.22 points and tenth consecutive quarterly decrease. Demand continues to surpass supply.
  • ・New Contract Rent Index (level of contract rent) is 94. (Q1 2010 = 100)
    Overall index remained unchanged from the previous quarter; however, index for large buildings (over 5,000 tsubo gross floor area) has increased by 4 points.
  • ・Contract Rent DI (buildings with rent increase versus buildings with rent decrease) is −2.
    Buildings with rent decrease slightly exceeded buildings with rent increase. This is the first negative figure in two years. Rent continued to decrease in less competitive buildings which failed to take the needs of tenants who are seeking to move for positive reasons.
  • ・Average Free Rent is 3.1 months.
    Decreased by 0.4 months quarter-on-quarter. Long-term free rent (over 6 months) was given to 25.1% of new leases; a decrease by 5.9 points quarter-on-quarter, indicating a compression of the free rent period.

­- Explanations for the results of each index are available in the PDF file.
- ­Summary of the indices is available on 7. Index Summary.
- ­Historical quarterly data is available on 8. Numerical Data for Entire Period.

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