Japan Major report - Japan Office Market Outlook 2015 (in English)
- The Tokyo office market is particularly tight, with the vacancy rate at around 4% for all grades at the end of 2014. Since owners are prioritizing higher rents in buildings nearing completion, there may still be space unlet when they are completed, but the resulting rise in vacancy rates is likely to be only short-term. On the back of tight supply-demand balance, Grade A assumed achievable rents (for new tenants on a face rent basis) are forecast to rise by around 17% over the next two years to the end of 2016.
- In Osaka, demand came to a standstill for a time in the second half of 2014, but the main reason for this was that choices are now very limited apart from the most expensive buildings. In 2015, around 10,000 tsubo of high quality space is expected to become available when a major corporation completes its own building, and this is likely to put life back into the market by meeting buoyant demand. Nevertheless, Grade A rents are already high and the trend is likely to be a gradual increase.
- In Nagoya, there is almost no space available in existing Grade A buildings. Two prime buildings are scheduled for completion in 2015 in the Nagoya Station area, which are expected to stimulate the demand which had recently become latescent due to lack of supply. At the same time, there is concern that secondary vacancies will arise in other areas as a result of this new supply, and building owners are therefore somewhat cautious about raising rents.