Categorized | International

Office Rents Expected to Decline in Tokyo

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Tokyo’s commercial office real estate market has struggled in the past year, causing rents to drop to record low levels. In the most recent report from the nation’s top real estate analysts, office rents are expected to continue their decline for at least the next six months.

The reason for the anticipated decline is that office supply and vacancy numbers are at their highest level in five years. New and available office space is expected to increase by twelve percent in the next few months, as two new office towers are expected to be completed by the spring of 2012.

The rents have dropped low enough to make various companies consider moving to a more ideal location. With that said, the next six months will definitely be an ideal market for tenants.

The office vacancy rate is up more than six percent from where it was just a few years ago. As such, rents have dropped to historic lows, as landlords struggle to keep their office property space filled to capacity.

Newer properties have performed the best in the last year, as their vacancy rate continues to drop. Companies that previously had their offices in the older buildings are opting to move to the new facilities, particularly since the rents are so cheap at this point in time.

Analysts believe that office rents will recover strongly after the next six-month period is over. They feel that the bottom will be hit in the next six months, and the market will turn around soon after.

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About Nancy Raven

Nancy is the main writer for the International section of the website. Sometimes she also helps Drew out on the Finance/Mortgage section as well.

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