Probably on the road to recovery, but recovery to pre-pandemic levels will likely vary by submarket.

• This quarter, average rents in the Tokyo 23W decreased 0.2% QoQ to JPY3,985 per sq m, although they remain 0.5% higher than a year ago.
• Rents in the C5W stayed flat over the quarter at JPY4,786 per sq m, translating to a yearly increment of 2.5%. The C5W was the only submarket that did not see a quarterly decline in rents.
• The C5W premium grew significantly to 20.0%, up 1.9ppts from last year, exceeding the pre-pandemic level.
• Shibuya posted the largest gain on a quarterly basis of 1.7%, also seeing an annual increment of 5.1%. However, much of this growth was due to the addition of brand-new buildings that came out this quarter.
• Rents of different sizes in the C5W submarket saw diverging trends this quarter.
• The average occupancy rate in the 23W decreased 0.9ppts from the previous quarter to 95.9%. The East submarket experienced the largest contraction at 1.3ppts QoQ.
• The South submarket remains a popular destination for young crowds to migrate to, replacing demand from young families that have tended to move further afield.