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Tokyo Grade A office rents rise for the first time in four years

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According to a JLL report, rents in Tokyo’s Grade A office market averaged JPY 33,860 per tsubo, per month, at end-1Q24, rising 0.9% q-o-q and falling 1.3% y-o-y.

The report said rents rose for the first time in 15 quarters in Akasaka/Roppongi and fell for the 16th consecutive quarter in Otemachi/Marunouchi as vacancies were filled.

Here’s more from JLL:
Capital values in 1Q24 rose 2.1% q-o-q for the first time in four quarters and was down 1.4% y-o-y. This reflected positive rent growth, while cap rates remained stable. Notable Grade A office transactions that closed in the quarter included the strata titled Toranomon Hills Business Tower, acquired by United Urban Investment Corporation for JPY 2.3 billion.

Positive net absorption continues
According to the Tankan Survey in March, the diffusion index of large manufacturers was 11, the first decline in three consecutive quarters due to stalled production from auto makers. The index of large non-manufacturers was 34 and increased for the eighth consecutive quarter to a 33-year high as inbound demand and economic recovery continued.

Even though there were no completions, the strong demand pushed net absorption in the Grade A office market in Tokyo to 49,700 sqm in 1Q24. By industry, the figure was driven by information and communications, energy and finance and insurance.
Source: Real Estate Asia

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