Tokyo Grade A Rent Growth Extends As Scarce Space Limits Tenant Choice

Tokyo's core office market stayed tight in the second quarter, with low vacancy giving landlords room to raise Grade A rents despite limited new supply.

Vacancy Remained Extremely Low

JLL reported Tokyo Grade A vacancy at 0.8 percent in Q2, while CBRE's broader Tokyo all-grade vacancy rate was 1.4 percent. The common signal is scarcity, especially for large, high-quality floor plates in central submarkets.

Rents Are Responding

JLL placed average Grade A monthly gross rent at JPY 42,109 per tsubo, up 4.6 percent from the previous quarter and 16.4 percent from a year earlier. CBRE also reported strong quarter-on-quarter rent growth for Grade A and Grade A-minus buildings.

Construction Costs Support Existing Towers

Delayed completions and high building costs limit tenant options. That strengthens owners in Otemachi, Marunouchi, Akasaka, Roppongi and other core business nodes when occupiers need contiguous space.

Buyer Checks

Investors should review tenant expiry, remaining floor availability, seismic performance, energy standards, capex requirements, transit access and rent-reversion assumptions. Residential buyers near office cores should compare management costs and resale depth.

Outlook

Tokyo's prime office scarcity should keep supporting rents and capital values. The main risk is not lack of occupier interest, but whether rising yields or delayed projects change underwriting faster than rents can adjust. Lease renewal evidence in Marunouchi and Otemachi will be especially important.

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