New Research

Average Offer Periods of Offices

Xymax Real Estate Institute (hereinafter, “Xymax REI”) has continuously made various analyses focusing on vacancies. In addition to vacancy rates it publishes on a regular basis, Xymax REI published the “Survey Report on Change in Vacancies” in January 2017, which captured the volume of vacancies in the market.

In this report, Xymax REI conducts a statistical analysis on the “offer period,” which is the duration of time from when a vacant office is put on offer to seek a new tenant until the end of the offer.

1 tsubo = approx. 3.3 sq m

Summary of Survey Results
    • The average offer period for blocks used as office in the Tokyo 23 Wards is five months.
    • (By location) Five central wards: five months; 18 peripheral wards: six months
    • (By size (gross floor area)) Less than 5,000 tsubo: five months; 5,000 tsubo or more: four months
    • (By building age) Less than 20 years: four months; 20 years or older: five months
    • (By size of office block) Less than 100 tsubo: five months; 100 tsubo or more: five months

In most offices, a termination notice is submitted to the owner six months prior to termination of the rent, after which, following a preparation period, the owner starts seeking tenants and ends the offer when the new tenant is decided. The length of the offer period is a major concern for many building owners and investors since it affects the cost for seeking tenants, as well as the period with no rent income such as gaps between lease agreements* and free rent periods. Figure 1 summarizes such periods.

Figure 1: Various Periods that Arise During Tenant Replacement
Figure 1: Various Periods that Arise During Tenant Replacement

In this analysis, Xymax REI calculated the offer period in monthly units based on the office vacancy data for the Tokyo 23 Wards gathered by Xymax. The analysis does not include vacancies for which offers are not made in the market, such as expansions within the same property.

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