June 13, 2014 5:04 am JST

Office demand, rents still rising in Tokyo

TOKYO -- Demand for office space in central Tokyo continues to climb as large companies relocate and businesses from smaller cities move into the capital.

     Real estate brokerage Miki Shoji said Thursday that the vacancy rate for five wards in central Tokyo -- Chiyoda, Chuo, Minato, Shinjuku and Shibuya -- came to 6.52% at the end of May, down 0.12 point from a month before and marking an 11-month streak of declines.

     Vacancies in buildings more than a year old dropped 0.19 point to 6.29%. Numerous properties have come onto the market, yet the vacancy rate for newer buildings rose less than 1 point given their high occupancy from the start.

     Building contractor Hinokiya Holdings moved its flagship store last month from Kuki, Saitama Prefecture, to Chiyoda Ward. It aims to bolster home sales in Tokyo and secure a larger pool of talented employees.

     Snack maker Kameda Seika, based in Niigata Prefecture, relocated and expanded its Tokyo office in February to accommodate an increase in employees.

     Karaoke parlor operator Koshidaka Holdings is moving its headquarters from Maebashi, Gunma Prefecture, to the World Trade Center building in Minato Ward in July. The company apparently decided the relocation would boost its expansion plans and help facilitate business travel within and outside Japan.

     At the end of May, the average rent listed was 16,501 yen ($160.16) per 3.3 sq. meters, up 46 yen from April and rising for the fifth consecutive month. Curbing costs is still a major concern for many businesses, so reasonably priced properties get filled easily, according to a staffer at Sanko Estate. With lower-priced units taken off the market, the average listed rental price is being pushed up.