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 Cities since 1986 (hereinafter referred to as "large-scale office buildings"). Through a diverse analysis of the results of this survey, we are also able to develop forecasts of future office market trends. We are pleased to present you with the results of our survey in the following report.
General Trends in Supply
- The Shimbashi-Toranomon area, which has seen a major increase in supply volume as well as growth in size of properties, is expected to become more competitive due to several large-scale development projects including a new metro station.
■ In Tokyo's 23 cities, there is expected to be abundant supply of large-scale office buildings in 2020 and 2023 while that supply will be low in 2021 and 2022. The average over the next 5 years is forecast to be about the same as the historic average. In addition, the average amount of floor space provided per property is trending upward. In 2023, the supply and the percentage of total supply of large-scale office buildings of 100,000㎡ or more are expected to be greatest since this report was first released, which shows that properties are growing in size.
■ Broken down by area, the three central cities will account for at least 70% of yearly total supply from 2020 through 2023, surpassing the historical average. In particular, the Shimbashi-Toranomon area, which has seen a marked increase in supply, is expected to become significantly more competitive due to several large-scale development projects.
General Trends in Demand - Demand for office space expected to remain firm
■ The percentage of companies that intend to lease more office space is trending upward every year. 45% of companies "expect to increase the number of workers." Among the reasons why companies intend to lease new office space, positive reasons for moving have been trending upward. For example, "to expand business or to accommodate an increase in employees" is the top reason for the sixth consecutive year. There is strong desire among companies to expand and demand for office space is forecast to remain firm.
Vacancy rate
- Vacancy rate at the end of 2018 falls to 1.9%, the first time in 18 years, since 2000, that it declines to the 1% level
■ The vacancy rate at the end of 2018 fell to 1.9%, the first time in 18 years, since 2000, that it declined to the 1% level. At the end of 2019, it is expected to remain at the low level of 2.0% due to strong demand for office space. At the end of 2020, it is forecast to rise slightly on account of the large supply.