INTRODUCTION

The growth in office demand is proceeding in earnest, and the Grade B1 office market is growing well as a result. Indeed, vacancy has tightened, and average rents have grown consistently in 2024, with further improvements anticipated throughout the coming year.

Strong growth in corporate profits continues to have a positive influence on office demand in Tokyo. Indeed, many companies are keen to consolidate and expand on business activities and aim to attract and retain their workforce. The financial forecast in this trailing year is also expected to remain elevated, if not break the previous record.

Moreover, remote working has generally been on the decline, with more companies keen to increase office attendance rates, while some flexible work arrangements remain in place and require some modern office amenities. With companies increasingly focusing on improving employee wellbeing through better working environments, many office relocations have taken place to higher quality offices, and as of Q1/2025, average Grade B vacancy rates in the C5W are very low, with most offices nearly fully occupied throughout the submarket.