New Research

Office Market Report
Tokyo | Q1 2019


(1 tsubo = 3.3 sq m)

  • ● In the January–March 2019 quarter, the Tokyo 23 Wards’ office market continued to see strong demand for office space and a drop in the vacancy rate, as several large office buildings were nearly filled by the time they were completed, and new vacancies were taken soon after going on the market. The rising trend of new contract rent has also continued.
  • ● The vacancy rate* was 0.81%, down 0.06 points from the previous quarter. In terms of the increase and decrease in vacancies,* the decrease exceeded the increase, with 106,000 tsubo decreasing and 98,000 tsubo increasing. The vacancy turnover ratio,* the rate of decrease in vacant office stock, was unchanged at 53.6%.
    *The calculation methods have been changed. Details are described at the end of the report.
  • ● The new contract rent index, the level of new lease rent, was unchanged at 123. The contract rent diffusion index, calculated by subtracting the percentage of buildings with a new rent decrease from that of buildings with a new rent increase, remained above zero for the sixteenth consecutive quarter at +19.
  • ● The paying rent index, which includes new and existing rents, was 94, up 3 quarter on quarter.
  • ● The average free rent months of lease with free rent was 1.5 months and ratio of free rent granted was 46.3%, indicating that, as in Q4 2018, free rent has become common in the market.
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