New Research

Office Market Report
Tokyo | Q1 2017


  • ● In the March 2017 quarter, the Tokyo 23 Wards' office market continued to see a decrease in vacancy rate and an increase in contract rent. The market looks tight with the vacancy rate at the 3% level but the rental growth remained slow.
  • ● The vacancy rate was 3.76%, a decrease by 0.09 points. Increase and Decrease in Vacant Space showed that the vacant space decreased by 276,000 tsubo and increased by 258,000 tsubo; the decrease surpassed the increase. Vacancy Turnover Ratio, which is the ratio of vacant space leased during the quarter to all the vacancy stock, is on the rise.
  • New Contract Rent Index (the level of new lease rent) was 108, an increase by 1 point. Contract Rent Diffusion Index, calculated by subtracting the percentage of buildings with a rent decrease from the percentage of buildings with a rent increase, was +6. Although the DI remained in the positive area, the decrease by 12 points was relatively large; we will pay close attention to what happens next.
  • Paying Rent Index (the level of new lease rent and the level of existing lease rent combined) was 88, an increase by 2 points.
  • Average Free Rent Month was 2.6 months, a decrease by 0.2 months. Ratio of Free Rent Granted also decreased for leases with two months or more free rent and those with six months or more free rent.
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