Office vacancy rate recovering

The overall demand for office space in Tokyo’s 5 central wards is showing signs of recovery  as owners are willing to offer large cuts in rents in an attempt to attract tenants. However, according to Miki Shoji, grade A vacancy rates continued to record a minor decline in the previous quarter of this year to 8.5% but the vacancy rate rose across the market as a whole is continuing to climb.

Average asking rents have fallen to a 6 year low of 18,264 yen per tsubo / 5525 yen per square meter, a 14.2% drop year on year.

Tokyo grade A rents fell by 10.5% q-o-q to US$9.6/sq ft/month (excluding CAM and tax) as landlords of a number of grade A buildings were unable to secure tenants at higher rents.

These facts indicate that the current state of the market is still very much in favor of tenants. Now is a great time to consider moving office if a company has budget availability. Owners are very willing to consider any offer that a potential tenant can bring to them. Many bargains can be found currently even in large, prestigious properties.