Japan Office MarketView Q2 2025

Tokyo: Grade A vacancy rate drops to 1.4%, breaking 2% threshold for first time in four years

 

The All-Grade vacancy rate slid by 0.5 pp q-o-q to 2.5% in Q2 2025, while the Grade A vacancy rate recorded a sharper decline of 2.2 pp q-o-q to 1.4%. Relocations to larger premises and in-house expansions were observed across a wide variety of sectors, as were new office openings. Rents rose for all grades, with Grade A rents registering a significant spike of 2.7% from the previous quarter. While an increasing number of landlords raised their asking rents, tenants also demonstrated an increased tolerance for such rent rises.

 

 

Osaka: Grade A vacancy rate drops, rents continue to rise

 

The All-Grade vacancy rate remained unchanged from the previous quarter at 2.6%, while the Grade A vacancy rate dropped by 0.4 pp q-o-q to 3.6%. Although there were vacancies remaining in the large property completed this quarter, existing vacancies were filled in several properties completed last year by companies opening new offices or relocating from company-owned premises. Rents increased across all grades for the fourth consecutive quarter, with Grade A rents continuing their strong surge seen in Q1 2025, driven by robust tenant demand.

 

 

Nagoya: Grade A rents record largest single-quarter increase since Q1 2020

 

The All-Grade vacancy rate slid by 0.4 pp q-o-q to 3.1% in Q2 2025. The Grade A vacancy rate dropped by 0.9 pp to 1.4%, falling below the 2% threshold for the first time since Q1 2021. During the quarter, relocations to larger premises, in-house expansions, and new office openings were observed across a wide variety of sectors such as IT. Rents also increased across all grades, with those in the Grade A segment recording a rise of 1.5% q-o-q. Asking rents were raised by landlords of several buildings, particularly those attracting strong tenant interest.

 

 

Regional cities: Rents rise in all 10 cities for first time since Q1 2020

 

All-Grade vacancy fell q-o-q in five of the 10 cities surveyed, and increased in the remaining five. Tenant demand was robust nationwide, with vacancies absorbed by companies relocating to new premises in superior locations or higher-grade buildings, as well as by those seeking to expand their office space or establish new offices. Rents rose q-o-q in all 10 cities for the first time since Q1 2020. While the rates of increase in regional cities were generally below those in the three major metropolitan areas, rents are gradually rising.