Robust corporate performance, the steady return to offices, and limited new incoming supply should support sustained growth in 2024.
- Office markets witnessed further rental growth in Q1/2024, albeit marginal, and the outlook continues to improve. Vacancy rates have also tightened overall.
- Average Grade A office rents in the C5W increased by 0.2% quarter-on-quarter (QoQ) and 0.3% year-on-year (YoY) to JPY32,656 per tsubo per month.
- The average Grade A office vacancy rate in the C5W tightened by 0.2 percentage points (ppts) QoQ, while remaining flat YoY at 3.0%.
- Average large-scale Grade B office rents experienced a moderate increase of 1.4% QoQ and 1.7% YoY to JPY24,895 per tsubo per month.
- Vacancy rates in the Grade B market tightened by 0.2ppts QoQ and 0.7ppts YoY to 3.4%.
- Satellite offices/flexible office spaces were an emerging trend even before the pandemic, and have been further proliferated by the continuation of hybrid work arrangements in the post-pandemic environment.