Japan Office MarketView Q1 2026

Tokyo: Grade A and Grade A- rents record second-highest q-o-q growth in history
The All-Grade vacancy rate for Q1 2026 fell by 0.1 pp. q-o-q to 1.5% in Q1 2026. Despite new supply reaching 103,000 tsubo, over twice the historical quarterly average, net absorption surpassed it at 114,000 tsubo. During the quarter, demand for office upgrades and expansions remained active across all sectors. Rent increases accelerated across all grades, with the Grade A and Grade A- segments both reporting their second-highest q-o-q growth rates on record.

Osaka: Rents surge across all grades; Grade B rents set new record high

The All-Grade vacancy rate in Osaka slid by 0.2 pp. q-o-q to 2.0% this quarter. The period saw brisk leasing activity across all floor space brackets. The Grade A vacancy rate dropped by 0.7 pp. to 3.0%, driven by tenants relocating to newer buildings for the purpose of locational upgrades and expansions. Rents accelerated across all grades. Grade B rents surged 3.9% q-o-q to JPY 16,150, surpassing the previous peak set in Q1 2008.

Nagoya: Two Grade A buildings launch at high occupancy of approximately 90%
During Q1 2026, the All-Grade vacancy rate in Nagoya dropped by 0.1 pp. q-o-q to 2.2%. Although two Grade A buildings added a significant 16,000 tsubo of new supply to the market, this space was absorbed by large-scale consolidations and relocations from properties being redeveloped, ensuring the two new properties commenced operations at roughly 90% occupancy. Rents rose across all grades, with solid Grade A rental growth lifting the overall market average.

Regional cities: Landlords’ aggressive pricing drives nationwide rent increases
In Q1 2026, the All-Grade vacancy rate fell q-o-q in seven of the 10 surveyed cities, increased in two, and remained unchanged in one. Demand remained robust over the quarter as occupiers prioritized office environment improvements. All-Grade rents rose in nine cities excluding Kanazawa, with Sapporo, Saitama, Hiroshima, and Fukuoka continuing to record rents at historical highs. Landlords retained a bullish attitude toward rent negotiations.