Since 1986, Mori Building Co., Ltd. (Minato-ku, Tokyo; President & CEO Shingo Tsuji) has regularly conducted market surveys of supply and demand trends for 10,000㎡-class or higher office buildings that were constructed in Tokyo's 23 Wards since 1986 (hereinafter referred to as "large-scale office buildings"). Through analysis of the results of this survey from diverse angles, future office market trend forecasts are also developed. We are pleased to present you with the results of our survey in the following report.

■Highlights
The vacancy rate in 2015 in Tokyo's 23 Wards, particularly in the Central 3 Wards, rose temporarily in the first half of the year in part due to completion of office buildings with high vacancies. However, it is forecast to improve by the close of 2015 to 3.8% in the Central 3 Wards and 4.3% in Tokyo's 23 Wards due to newly constructed buildings expected to be full upon completion and vacancies expected to be filled in existing buildings in the second half of the year, supported by firms' expansion of business and/or accommodation of employee increases.

■Supply Trends
＜Tokyo's 23 Wards＞
○Annual supply in Tokyo's 23 Wards from 2015 through 2019 will average 1,190,000㎡/year, exceeding the previous average (1,030,000㎡/year).
○Supply for 2018-2019 will be larger than our expectations last year due to shifts in the completion period for large-scale office buildings scheduled to be built before and after this period.
＜Central 3 Wards＞
○Supply in the Central 3 Wards for the next 5 years will be 850,000㎡/year, exceeding the average of the past decade (670,000㎡/year).
○The supply rate in the Central 3 Wards for the next 5 years will be 71%, an increase over the 56% rate of the past 5 years.

■Demand Trends
＜Tokyo's 23 Wards＞
○Vacancy rate at the end of 2014 dropped 1.9 points to 4.3%, compared to the end of the previous year.
○The vacancy rate for the first half of 2015 rose 0.3 points to 4.6%, compared to the end of the previous year, due to absorption capacity (600,000㎡) falling below supply (750,000㎡).
○For year 2015, absorption capacity (1,050,000㎡) and supply volume (1,110,000㎡) will be mostly the same, and the vacancy rate at the end of 2015 is forecast to remain steady at 4.3%, the same as the end of the previous year.
＜Central 3 Wards＞
○Vacancy rate at the end of 2014 dropped 2.4 points to 3.5%.
○The vacancy rate for the first half of 2015 rose 0.8 points to 4.3%, compared to the end of the previous year, due to absorption capacity (390,000㎡) falling below supply volume (540,000㎡).
○For year 2015, absorption capacity (730,000㎡) will fall below supply volume (790,000㎡), and the vacancy rate by the close of 2015 is expected to rise 0.3 points to 3.8%, compared to the end of the previous year.