Real estateOffice Building Vacancy Rates in Five Major Wards of Tokyo Decline for Four Consecutive Months to Only 1.68%!

3633 min

On November 12, Building Planning Co., Ltd. announced the results of a survey of office buildings in the major areas of the six major metropolises (Tokyo, Nagoya, Osaka, Fukuoka, Sapporo, and Sendai) nationwide in October 2019. The survey targets are office buildings of 100 tsubo (a Japanese unit of real estate measurement equaling about 3.31 square meters, or 35.58 square feet) or more and for which contract rents are for 100 to 300 tsubo.

The average vacancy rate in Tokyo’s five major wards (Chiyoda Ward, Chuo Ward, Minato Ward, Shinjuku Ward, and Shibuya Ward) decreased to 1.68% (down 0.30 points from the previous month) for the fourth consecutive month. What this essentially means for the real estate investor is that if he or she buys an office building or other piece of commercial real estate, it will be occupied between 98% and 99% of the time, resulting in a very stable ROI.

By ward (Japanese: 区, -ku), Chiyoda-ku was 1.00% (down 0.68 percentage points), Chuo-ku was 2.05% (down 2.24 percentage points), Minato-ku was 2.09% (up 0.29 percentage points), Shinjuku-ku was 1.64% (down 0.35 percentage points), and Shibuya-ku was 1.84% (up 1.26 percentage points). The estimated contracted rent per tsubo is 22,368 yen (up 428 yen from the previous month).

In other cities, Nagoya had a vacancy rate of 1.57% (up 0.15 percentage points). Rent was 11,637 yen (up 95 yen). Osaka was 1.28% (up 0.04 percentage points). Rent was 10,122 yen (up 327 yen). Fukuoka was 1.47% (up 0.02 percentage points). Rent was 13,727 (up 77 yen). Sapporo was 2.85% (down 0.42 percentage points). Rent was 10,600 yen (up 78 yen). Sendai was 1.83% (down 0.11 percentage points). Rent was 10,307 yen (down 128 yen).