Arab News Japan

TOKYO: A survey by Mori Building, one of Japan’s leading urban developers, says unless there is a major economic slowdown, office demand in Tokyo is expected to remain strong and vacancy rates are likely to continue trending downward.　

The survey showed that the supply ratio of properties with a gross office-floor area of 100,000 sq. meters or more was 74 percent in 2024 and is forecasted to reach 80 percent in 2028 and 91 percent in 2029, indicating that office buildings will likely increase in size over the next five years. 

However, the average annual supply of large office buildings over the five-year period to 2029 is expected to be lower than the historical average.

Tokyo’s five most central wards – Chiyoda, Chuo, Minato, Shinjuku, and Shibuya – are expected to account for 86 percent of the average annual supply between 2025 and 2029, close to the 85 percent average over the 10-year period that ended in 2024. 

The survey anticipates a greater concentration of large office buildings in central Tokyo, especially in the Nihonbashi-Yaesu-Kyobashi, Shinagawa, and Akasaka-Roppongi areas, where major redevelopments will contribute significantly in the five-year period to 2029.

The overall vacancy rate declined significantly to 3.7 percent in 2024, down 2.1 percentage points from the end of 2023, and in major business areas it fell 2.9 points to 3.3 percent, but corporate demand for improved locations, higher-grade buildings, and innovative office environments remained strong.