While subtle movement away from central areas has continued, some reversal of this trend has also been observed.

• Rents in the Tokyo 23 wards (23W) now stand at JPY4,046 per sq m, showing a quarterly recovery with an increase of 1.2% quarter-on-quarter (QoQ), despite seeing an annual decrease of 2.6% year-on-year (YoY).
• Average mid-market rents in the central five wards (C5W) have declined for the fourth consecutive quarter, and are currently at JPY4,749 per sq m, showing a decline of 3.6% YoY, amid a smaller quarterly decline of 0.6%.
• In line with its decreasing average rents, the C5W premium has narrowed to 17.4%, whereas the West and Outer East submarkets posted notable growth.
• At the ward level, Adachi in the Outer East, marked the strongest growth this quarter, posting a 7.2% QoQ gain. On an annual basis, Arakawa displayed the largest gain of 10.5% YoY.
• In the C5W, average rents for units in the 15-30 sq m size band – which represent the majority of listings – have remained flat, while larger units saw some small corrections.
• The average occupancy rate in the 23W has increased 0.2ppts to 96.1%. The C5W has begun to see recovery in occupancy rates, up 0.9ppts to 95.1% this quarter.
• Mixed trends have appeared in the market: while there has been subtle movement away from central areas, some evidence also points to a reversal of this trend, especially in quality assets.