- Corporate performance remained positive in 2024, and the demand for office space due to corporate expansion and heightened office attendance has propelled the market.
- Supply in 2024 was relatively moderate, and most newly completed properties were absorbed by the market with limited issues.
- New supply in 2025 will be over double that in 2024, with a large concentration in Minato. In particular, Takanawa will emerge as a prominent business district with the phased completion of the enormous THE LINKPILLAR development.
- Pre-leasing activity for new supply in 2025 has been proceeding well overall, and we forecast stable vacancy rates and continued rental growth over the year.
- Our current estimate for new supply in 2026 has increased due to notable project delays, and is presently on par with 2025, with large amounts of new supply forecast for Nihonbashi and Yaesu, and Takanawa submarkets, in particular.
- New supply in 2027 will be relatively moderate, although a few notable mixed-use projects are scheduled for completion in the Shibaura and Hamamatsucho, and Toranomon and Kamiyacho submarkets.
- The iconic Torch Tower will be by far the largest completion in 2028, located in the Marunouchi and Otemachi submarket, which will transform the northern edge of Tokyo Station.
- Elevated construction costs will continue to force delays and redesigns to development projects, which should make existing buildings more attractive and stabilise the market.
Strong office market performance eases concerns over heightened supply in 2025
The Tokyo office market is witnessing strong leasing demand from tenants, with rents seeing sustained growth and vacancy falling over consecutive quarters. Positive corporate performance and business expansions on top of the labour shortage, not to mention elevated office attendance, have bolstered the demand for modern, conveniently located offices. As such, pre-leasing for incoming offices in 2025 has proceeded well, dispelling fears of major fluctuations due to the large influx of new supply.
Savills Research & Consultancy