Xymax Real Estate Institute

RESEARCH REPORTSupply of New Office Space 2022
January 12, 2022

Xymax Real Estate Institute (hereinafter, “Xymax REI”) hereby releases a report on the Supply of New
Office Space 2022 covering the 23 wards of Tokyo (hereinafter, “Tokyo 23 Wards”) and the city of Osaka(hereinafter, “Osaka City”). The amount of new office supply, which is an aggregation of rentable areas ofoffices that will be newly constructed in the coming years (hereinafter, “new supply”), has a direct impact
on the supply-demand balance of the office market going forward. Each year, Xymax REI aggregates therentable areas of office space in buildings completed in the Tokyo 23 Wards and Osaka City that have agross floor area of 3,000 tsubo or more and are mainly for office-use.
1 tsubo = approx. 3.3 sqm

Main Findings
1. TOKYO 23 WARDS | Supply of New Office Space 2022
A supply of 80,000 tsubo is scheduled in 2022, the smallest amount of supply in the past 10 years.
2023 is expected to see the largest supply in the next four years (from 2022 to 2025) at 231,000tsubo.

The average annual supply between 2022 and 2025 is forecast at 152,000 tsubo, less than theaverage annual supply of the past 10 years of 178,000 tsubo.

87% of the supply between 2022 and 2025 is concentrated in the 5 central wards of Chiyoda, Chuo,Minato, Shinjuku, and Shibuya.

The new supply rate (new supply between 2022 and 2025 versus the office stock at the end of 2021)
in Tokyo 23 Wards is expected to be around 4.7% (annual average: 1.2%).

2. OSAKA CITY | Supply of New Office Space 2022
A supply of 46,000 tsubo is scheduled in 2022.

The average annual supply between 2022 and 2025 is forecast at 43,000 tsubo, more than theaverage annual supply of the past 10 years of 16,000 tsubo.

The average annual supply between 2022 and 2025 (43,000 tsubo) is approximately a third of thatof Tokyo 23 Wards (152,000 tsubo).

The new supply rate (new supply between 2022 and 2025 versus the office stock at the end of 2021)
in Osaka City is expected to be around 6.1% (annual average: 1.5%).

Supply of New Office Space 2022
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
Copyright © 2022 Xymax Real Estate Institute Corporation. All rights reserved.

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RESEARCH REPORT｜Xymax Real Estate InstituteTOKYO 23 WARDS | Supply of New Office Space 2022
The supply of office buildings with a gross floor area of 3,000 tsubo or more is expected to be 80,000 tsuboin Tokyo 23 Wards in 2022, less than the smallest supply of the past 10 years, which was 110,000 tsubo in 2013
(Figure 1). 2023 is expected to see a supply of 231,000 tsubo, which is more than the average annual supplybetween 2012 and 2021 (hereinafter, the “10-year average”), which was 178,000 tsubo. The average annual
supply between 2022 and 2025 is expected to be 152,000 tsubo, which is less than the 10-year average.
The expected average annual supply of medium-sized buildings with a gross floor area between 3,000 tsubo
and 10,000 tsubo is 20,000 tsubo in 2022–2025, less than the average annual supply in 2012–2021, which was25,000 tsubo. The average annual supply of large buildings with a gross floor area of 10,000 tsubo or more in
2022–2025 (132,000 tsubo) is also expected to be less than the 2012–2021 annual average of 153,000 tsubo.
The new supply rate, which is the percentage of supply in 2022–2025 to the office stock at the end of 2021
(13 million tsubo) is expected to be 4.7% (annual average: 1.2%).
Figure 1: Supply in Tokyo 23 Wards (Net Rentable Area)

Supply of New Office Space 2022
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
Copyright © 2022 Xymax Real Estate Institute Corporation. All rights reserved.

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RESEARCH REPORT｜Xymax Real Estate InstituteBy ward, 75% of the total supply in 2022–2025 is expected in the 3 central wards (Chiyoda, Chuo and Minato)(Figure 2). Minato Ward accounts for 53% of total, the largest share of supply among all wards. If we expand
the range to the 5 central wards (the 3 central wards plus Shibuya and Shinjuku wards), 87% of the total supply
is expected in these areas, indicating that supply is concentrated in central Tokyo.
Figure 2: Supply by Ward (2022–2025)(Figures in brackets represent the percentage to total supply in 2022–2025)

By area, supply is expected in areas including the Roppongi-Azabu, Nihombashi-Yaesu-Kyobashi, Shiba-Mita,
Toranomon, and Shinagawa Station East Exit areas (Figure 3).
Figure 3: Supply by Major Area (2022–2025)

The highlights of the major areas are as follows:〇The Roppongi-Azabu area has the largest supply of 80,000 tsubo. Large supply is scheduled in 2023 due tothe Toranomon & Azabudai Category One Urban Area Redevelopment Project, which includes a hotel and aninternational school.
〇In Nihombashi-Yaesu-Kyobashi, large supply is scheduled in 2022 due to the A-1 zone of Tokyo Midtown
Yaesu, which is directly connected to Tokyo Station.
〇In Shiba-Mita, large supply is planned in 2023 due to the Mita Redevelopment Project (tentative name).
〇 The Toranomon area is undergoing comprehensive redevelopment that includes infrastructure, such as
Beltway 2 and the Bus Rapid Transit (BRT) system, as well as offices and medical institutions, and will continue
to see supply due to large redevelopment projects such as the Toranomon Hills Station Tower (tentative name).
〇At Shinagawa Station East Exit, large supply is scheduled in 2025 due to Shinagawa Development Project
Phase I.
Supply of New Office Space 2022
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
Copyright © 2022 Xymax Real Estate Institute Corporation. All rights reserved.

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RESEARCH REPORT｜Xymax Real Estate Institute

Osaka City | Supply of New Office Space 2022
With regard to the supply of office buildings with a gross floor area of 3,000 tsubo or more in Osaka City,large supplies of 46,000 tsubo and 74,000 tsubo are scheduled in 2022 and 2024, respectively, bringing theexpected total supply between 2022 and 2025 to 170,000 tsubo (Figure 4). The average annual supply between2022 and 2025 is expected to be 43,000 tsubo, which is approximately three times the 10-year average of 16,000
tsubo and approximately a third of the average annual supply in Tokyo 23 Wards in 2022–2025 of 152,000 tsubo.
The new supply rate, which is the percentage of supply in 2022–2025 to the office stock at the end of 2021
(2.79 million tsubo) is expected to be 6.1% (annual average: 1.5%).
Figure 4: Supply in Osaka City (Net Rentable Area)

Supply of New Office Space 2022
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
Copyright © 2022 Xymax Real Estate Institute Corporation. All rights reserved.

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RESEARCH REPORT｜Xymax Real Estate Institute
By area, supply is expected in the Umeda, Yodoyabashi, Honmachi, Shin-Osaka-kita, and Dojima areas (Figure5).
Figure 5: Supply by Area (2022–2025)

The highlights of the areas are as follows:〇Umeda is expected see the largest supply of 96,000 tsubo. Large supplies are scheduled in the area due tothe Osaka Umeda Twin Towers South in 2022 and the Umeda 3-chome Plan (tentative name) and Umekita
Phase 2 Development Project in 2024.
〇In Yodoyabashi, large supply is expected in 2025 due to the Yodoyabashi Station East District Urban Renewal
Project and the Yodoyabashi West District Urban Area Redevelopment Plan.

Supply of New Office Space 2022
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
Copyright © 2022 Xymax Real Estate Institute Corporation. All rights reserved.

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RESEARCH REPORT｜Xymax Real Estate Institute
Survey Overview
Survey timing

December 2021

Coverage

23 Wards of Tokyo, city of Osaka

Target properties

Target data

MethodProperties with a gross floor area of 3,000 or more that are used mainly as office space (excludes
owner-occupied buildings)

Net rentable area for offices (tsubo)

Mostly based on publicly available information such as newspaper articles, with some fieldsurveys and interviews with business operators* This survey targets the area of buildings to be newly supplied. Note that this is not a completesurvey.
* Published rentable areas are used in the study, if available. If not, the study uses the area
estimated from gross floor area based on a formula derived from a joint study with the Naoki

Remarks

Kato Lab, Architecture and Architectural Engineering, Kyoto University Graduate School ofEngineering.
* The amount of new supply in this survey is an estimate at the time of the survey. The figure ofnew supply fluctuates as information is added and updated on a daily basis.
* The sum figures may not match due to rounding.

For further inquiries please contact below:Xymax Real Estate Institutehttps://soken.xymax.co.jp | E-MAIL: info-rei@xymax.co.jp

Supply of New Office Space 2022
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
Copyright © 2022 Xymax Real Estate Institute Corporation. All rights reserved.

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