New Research

Paying Rent Index is released
The new index shows changes in office rents paid by tenants and underlines the stability of office properties.

Xymax Real Estate Institute developed a new index Payment Rent Index based on the data of lease contracts signed for office buildings in Tokyo 23 Wards. This index will be released every quarter on our website.

Up until now many real estate market indices based on new rents existed, but those based on paying rents* which represents tenant's office rents and the income streams from office buildings did not exist in the past.

* Paying rents include not only new rents, which are the rents agreed by new tenants, but also existing rents, which are the rents agreed by existing tenants, and are largely influenced by ongoing relationship between the owner and the tenant, meaning existing rents are determined based on a different mechanism compared to new rents which are basically determined based on market balance.

Paying Rent Index (Figure 1), which we have developed, shows changes in office rents over time and has the following unique features:

  • 1. Sample data includes both new rents and existing rents.
  • 2. Rents are based on tenants rather than office buildings.
  • 3. Statistical approach (Hedonic approach) is used to adjust the use of different sample data, deterioration of office buildings due to age, and changing preference of tenants.
Figure 1: Paying Rent Index (Q1 2005 – Q2 2015)

This index will be a useful tool for real estate owners and investors in understanding actual income from office buildings and making appropriate decisions. The income stability of office buildings was not easy to demonstrate with quantitative data, but now this index will help market participants understanding the stability and giving an explanation on the stability. It is also expected that this index can be a benchmark for office tenants in making strategic decisions based on the understanding of changes of entire rents including those of spaces they have been occupying. (See following pages for the data, analysis, index overview and index data to date.)

Download PDF File
New Research
Back Number