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Central Tokyo office rents up 11.97% over last year

Real estate consulting firm Miki Shoji recently released their quarterly Tokyo Office Building Market Research Report for October 2007. The report covers the five central wards of Tokyo (Shinjuku, Shibuya, Minato, Chiyoda and Chuo Wards). It surveys 2,618 office buildings (25 new and 2,593 pre-existing) that have at least 330 square meters of office space for rent on each floor. New buildings are defined as having their office space come online after October 1, 2006.

Vacancy rates in downtown Tokyo stood at 2.59%, which was down 0.08% from the previous month. At the end of September, vacancy rates at newly built buildings stood at 4.74%, which was 2.85% lower than September of last year, but higher than the 3.43% measured in July of this year, and a good amount higher than this year’s low of about 2%, which was seen in May.

Chiyoda remains the ward with the lowest vacancy rates, at 1.85%. Minato was the ward with the highest, at 3.64%.

The average rent per tsubo, or about 3.3 square meters, was at 21,161 yen, which was 11.97% higher than the same month last year, though only 0.31% higher than the previous month. The average rent at newly built buildings stood at 35,291 yen per tsubo, which was 24.26% higher than a year before, and 2.47% higher than the previous month.

The report concludes by saying that the trend of rising office rents is expected to continue due to the fact that most office space in downtown Tokyo are still being taken off the market as soon as they appear in listings. Both new large-scale new office buildings in Chiyoda ware were completely full of tenants before coming online.

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