Since 1986, Mori Building Co., Ltd. (Minato-ku, Tokyo; President & CEO Shingo Tsuji) has regularly conducted market surveys of demand and supply trends for 10,000m2-class or higher oce buildings that were constructed in Tokyo's 23 wards since 1986 (hereinafter referred to as "large-scale oce buildings"). Having just completed the tabulation of the results of our most recent survey, we are pleased to present you with this report.

Supply volume exceeded the historical average (1,030,000m2), but greater demand than predicted led to an even lower vacancy rate in 2015.
The average supply volume is expected to surpass the historical average over the next 5 years. Part of the supply volume in 2019, however, has been pushed back to 2020, resulting in a smaller difference between years.


■Supply Trends
<Tokyo's 23 Wards>
○ Supply volume in 2015 of 1,090,000m2(125% of the previous year's volume) exceeded the historical average for the first time in 3 years.
○ Supply volume in 2016 of 1,020,000m2(94% of the previous year's volume) is expected to be at approximately the historical average.
○ Over the next 5 years, the average supply volume will be 1,140,000 m2/year. In particular, a large supply volume after 2018 will boost the average supply. Meanwhile, part of the supply volume in 2019 which was expected to be large has been pushed back to 2020, resulting in a smaller difference between years.

■Demand Trends
<Tokyo's 23 Wards>
○ Absorption capacity (new demand) in 2015 was 1,140,000m2 (82% of the previous year).
○ Vacancy rate at the end of 2015 was 3.9% (0.4 point decrease from the previous year). Although the vacancy rate for the end of 2015 was forecast to be 4.3% last year, the actual vacancy rate decreased more than predicted due to an accumulated absorption capacity in the second half of the year which exceeded expectations.

■"Survey of Large-Scale Office Building Market in Tokyo's 23 Wards" Framework
Research area: Tokyo's 23 Wards
Research subject buildings: Buildings with total oce oor area exceeding 10,000m2 with a construction completion date of 1986 or later

※ Supply volume is calculated based on publicly available information as well as on-site and "interview" research undertaken in December 2015.
※ Supply volume is a tabulation of gross total oce oor area of all large-scale oce buildings completed since 1986, including properties owned and used by the same company.
※ Absorption capacity (new demand) is the newly occupied oce oor space for a given year of all large-scale oce buildings constructed since 1986 and is calculated as follows: (vacant oce oor space at the end of the previous year) + (newly supplied oor space) - (vacant oor space at the end of the current year). In order to compare "supply volume" and "demand volume", leasable oor space values are converted to a total oor area value by applying an average "eective rentable space ratio" for large-scale buildings.