New Research

Office Market Report
Tokyo | Q4 2017


(1 tsubo = 3.3 sqm)

  • ● In the December quarter, the Tokyo 23 Wards' office market remained tight with the vacancy rate dropping below 3% to the 2% level. Some of the new contract rent indicators showed a slowdown, requiring attention to future developments.
  • ● The vacancy rate was 2.96%, down 0.32 points. The Decrease in Vacant Space was 197,000 tsubo, while the Increase was 163,000 tsubo; decrease exceeded increase. The Vacancy Turnover Ratio (the ratio of vacant space leased during the quarter to all the vacancy stock) is rising.
  • ● The New Contract Rent Index (the level of new lease rent) was 106, down 3 points. The Contract Rent Diffusion Index, calculated by subtracting the percentage of buildings with a rent decrease from the percentage of buildings with a rent increase, rose by 4 points over the quarter to +17.
  • ● The Paying Rent Index (the level of new lease rent and the level of existing lease rent combined) dropped 3 points to 89.
  • ● The Average Free Rent Month of Lease with Free Rent was 3.6 months, an increase by 0.3 months. Although the Ratio of Free Rent Granted increased in all segments, the percentage of free rent for 6 months or more was small.
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