New Research

Office Market Report
Tokyo | Q2 2018


(1 tsubo = 3.3 sqm)

  • ● In the April-June quarter, the Tokyo 23 Wards' office market saw a continued drop in the vacancy rate, as companies' demand for office expansion remained robust, new properties were already filled by the time they were completed, and existing vacancies succeeded to find tenants promptly. The rising trend of new contract rent also remained unchanged.
  • ● The vacancy rate was 2.28%, down 0.23 points from the previous quarter. The Decrease in Vacant Space exceeded Increase, with 212,000 tsubo decreasing and 184,000 tsubo increasing. The Vacancy Turnover Ratio (the ratio of vacant space leased during the quarter to all the vacancy stock) continued to rise.
  • ● The New Contract Rent Index (the level of new lease rent) was 113, up 4 points. The Contract Rent Diffusion Index, calculated by subtracting the percentage of buildings with a rent decrease from that of buildings with a rent increase, remained above zero for the thirteenth consecutive quarter at +22.
  • ● The Paying Rent Index (the level of new lease rent and the level of existing lease rent combined) rose 1 point to 91.
  • ● The Average Free Rent Months of Lease with Free Rent was 3.1 months, a decrease of 0.1 months. Granting of free rent as an incentive remained low, with the ratio of free rent granted for six months or more at 6.7%.
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