Tokyo
• Strong netabsorptionduetounwavering demand forofficefromheadcount increaseandbusinessexpansion
• Notabledrop invacancyratesto0.9%
• Rents rise2.4%toJPY37,042per tsubo,markingaseventhconsecutive quarterincrease
According totheTankanSurveyinSeptember, thediffusionindex of largemanufacturersrose1point to14.Theindex oflargenonmanufacturerswasunchanged at34.Strong demand forofficeisseen incentralTokyo duetobusinessexpansion andincreasein headcount. NetabsorptionforTokyo GradeAofficewas204,600sqm inQ32025.Byindustry, thefigurewasdriven byinformation services, manufacturing, andmedical services.
Onenew GradeAofficebuildingwascompleted inQ32025.Tokyo's vacancy rateintheGradeAofficemarketinQ32025averaged 0.9%, falling160bpsq-o-q and230bpsy-o-y. fell.Almostnovacancies left inOtemachi/Marunouchisubmarketanda140bpscompression was seeninAkasaka/Roppongi submarkets.
Rents inTokyo's GradeAofficemarketaveraged JPY37,042per tsubo,permonth, up2.4%q-o-q and7.5%y-o-ybyend Q32025. Rents inbothAkasaka/Roppongi and Otemachi/Marunouchi submarketsroseaslandlord-favourable marketconditions continue
duetotightsupplyanddemand.
CapitalvaluesinQ3wereup4.2%q-o-q and12.9%y-o-yasrents werehigherandcapratesremained unchanged fromtheprevious quarter.NotableGradeAofficetransactionsannounced thisquarter included apartialstakeofGranTokyo SouthTower (stratatitle) byJR EastRealEstateAssetManagement Co.Ltd.
Outlook
According toOxfordEconomics' forecastasofSeptember 2025,the year-end 2025GDPgrowthhasbeenrevised upwardto1.0%andthe CPIto3.2%.Risksinclude impactoftariffs,heightened inflationfrom Sanaenomics andadownturn inoverseas economies. Leasing volume isexpected toslowdown inthenextyearasnew supplyis slightlylower, however, officedemand remains veryrobust Capital valuesareprojected tocontinue torisenext yeardriven byfurther rentincreases.
Fundamentals
Note:Financialandphysical indicatorsareforthe5KusGradeAofficemarket.Datais onanNLAbasis.
Historicalsupplyanddemandtrends
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Senior Director
Research-Japan
yuto.ohigashi@jll.com
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