Tokyo office brokerages dig into details to avoid price dips
Big supply jump seen loosening rental market in 2018
TOKYO -- With many newly constructed office buildings seen loosening the Tokyo market next year, leasing brokerages are publicizing more detailed, localized market information to prevent prices of prime properties from falling.
Sanko Estate offers data on market-rate rents in smaller sections than before. Tokyo's Chiyoda Ward, for instance, is split into three areas -- Marunouchi and Otemachi; Sotokanda and Iwamotocho; and Kojimachi and Bancho. It also reports data by building size measured by the space of a single floor. The rent for a large building in the Marunouchi and Otemachi area with a single-floor space of at least 660 sq. meters, for example, is 38,709 yen ($345) per 3.3 sq. meters.
With many owners of prime buildings opting not to disclose lease details openly, Sanko Estate also has begun including information it obtains in other ways from owners in the data sample to bolster accuracy. The brokerage will offer similar information for major cities across the country.
Xymax Real Estate Institute has started disclosing changes to the amount of newly vacant and no longer vacant space along with the vacancy rates. These rates change based on factors such as lease termination, new occupancy and availability of fresh properties. The new information will help determine whether changes in vacancy rates are linked to shifts in supply or demand.
For Tokyo's 23 wards during the October-December period, 693,000 sq. meters became newly vacant compared with 785,400 sq. meters of previously vacant space no longer available for rent, according to Xymax Real Estate. As companies with brisk earnings required more office space, the vacancy rate fell.
Many new buildings become available next year in the 23 wards, raising the fresh supply of office space to 861,960 sq. meters in 2018 -- up about 30% from 2016 and highest since 2012.
Rental prices have grown only mildly, failing to rebound to levels seen before the 2008 financial crisis. "We can avoid price competition far below market rates by offering detailed information," said Toyokazu Imazeki, Sanko Estate's chief analyst.
More in-depth information aids in a prospective tenant's decision to rent office space, and may revitalize the market by improving transparency as well.