Vacancies rose and rents fell at downtown Tokyo office buildings in October

November 10, 2008
By Ken Worsley

According to data released late last week by real estate consultancy Miki Shoji, the vacancy rate at office buildings in downtown Tokyo rose 0.23% in October to 4.30% . October’s figures showed vacancies rising for the ninth straight month.

Broken down into categories, the vacancy rate at new buildings (those finished within the past year) jumped from 7.92% in September to 10.57% last month. October’s figure for vacancies at new buildings is the highest seen so far this year. The vacancy rate at existing buildings increased from 3.95% in September to 4.17% last month.

Miki Shoji’s report takes into account the rents and vacancies at office buildings in Chiyoda, Shibuya, Shinjuku, Minato and Chou wards in Tokyo. Vacancies in all five wards are now higher than they were at the ends of 2007 and 2006, and are roughly comparable to rates seen at the end of 2005, when vacancy rates were declining from their most recent peak at the end of 2003.

The average rent in those five wards was 22,559 yen per tsubo (about 3.3 square meters) at the end of October. This was the second straight month of decline. The highest rent was found in Shibuya ward, at 23,962 yen per tsubo, while the lowest was in Shinjuku, at 19,702 yen.

The average rent per tsubo at new buildings was 30,338 yen in October, down from 35,906 yen seen at the end of 2007. The average rent at existing buildings was at 22,260 yen per tsubo at the end of October. This figure is actually higher than what was seen at the end of 2007 (21,683 yen), and shows that the decline in rent values is being heavily influenced by the increasing vacancies and lower rents at newly opened buildings.

Filed Under Real Estate