Tokyo Office

Asian Cities

2H 2017


Large-scale Grade B office1 metrics in the central five wards (C5W)2 have been improving as Tokyo office market fundamentals remain sound. Grade A office vacancy has remained tight and some demand appears to have spilled over to Grade B offices. Grade A vacancy in Shinjuku and Shibuya is particularly tight, and rental growth for Grade B offices in these wards has outpaced growth in other wards.

As acquisition opportunities for Grade A offices remain scarce, investors will likely continue to switch their focus to Grade B offices. Relatively low rents for Grade B offices offer upside potential for rental increases, and investors who can identify underperforming properties and successfully reposition them may be able to reap handsome returns. Additionally, small- and middle-size companies have been increasing profitability and support the upward trend in the Grade B segment. Some developers are attempting to take advantage by entering the midscale office market.


Key contacts

Simon Smith

Simon Smith

Senior Director
Research & Consultancy

Two Exchange Square

+852 2842 4573


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