On the 4th, Mitsubishi Estate Real Estate Services Co., Ltd. released the results of a survey on the vacancy rates and average advertised rents of large-scale office buildings in Tokyo's major five wards (Chiyoda, Chuo, Minato, Shinjuku, and Shibuya) and Tokyo's major seven wards (the five wards plus Shinagawa and Koto) for the year 2023 (January to December). The survey covered office buildings with a floor area of 3,000 tsubo or more.
In Tokyo's major five wards, the vacancy rate remained in the 6% range, reaching 6.31% as of the end of December 2023, an increase of 0.06 percentage points compared to the same month of the previous year. In Tokyo's major seven wards, the vacancy rate rose to 7.05% as of the end of December 2023 and then gradually decreased. As of the end of December 2023, it was 6.44%, a decrease of 0.5 percentage points, showing an increase for the first time in five months. Both the major five and seven wards have exceeded the appropriate vacancy rate of 5% for 34 consecutive months since February 2021.
As of the end of December 2023, the average advertised rent in Tokyo's major five wards was ¥339,900 per tsubo, an increase of ¥683 compared to the previous year, while in the major seven wards, it was ¥281,530, an increase of ¥1,132. The average advertised rent in the major five wards exceeded ¥30,000 for the first time in 25 months since November 2023. While the trend in actual transaction rents remained mostly flat, some areas experienced a decline. Additionally, there continued to be a significant gap between advertised rents and actual transaction rents, particularly in high-rent large-scale buildings.
The new supply of office buildings in Tokyo's major five wards in 2023 was approximately 390,000 tsubo, exceeding the historical average (320,000 tsubo) for the first time in three years. The market is showing signs of recovery, indicating demand surpassing new supply.
Regarding relocation trends, Mitsubishi Estate Real Estate Services noted that while relocation under the premise of "workstyle reform" is prevalent, relocations aimed at "improving communication," "enhancing employee engagement," and "securing talent" are also prominent. The company commented that "relocations aimed at securing talent in an environment where the working environment is increasingly valued have become a trend."
Reprinted from: Real Estate Distribution Research Institute Co., Ltd. “R.E.port”
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