Xymax Real Estate Institute

RESEARCH REPORTTOKYO 23 WARDS | Supply of New Office Space 2018
& Office Stock Pyramid 2018
December 7, 2017

Xymax Real Estate Institute hereby releases its report on the Supply of New Office Space 2018 andOffice Stock Pyramid 2018 covering the Tokyo 23 Wards area. The volume of new office supply,
which is an aggregation of rentable areas of offices that are newly constructed in the coming years(hereinafter, “new supply”), indicates the direct impact on the market balance in the future. The
Office Stock Pyramid is an aggregation of the rentable areas of office buildings in the market andindicates the breakdown of the office building stock (rentable area and number of buildings) by size ofthe building (small & medium/large) and by age, as well as the proportion of large andsmall/medium-sized buildings and their age composition.
1 tsubo = approx. 3.3 sq m
SUMMARY OF RESULTSTOKYO 23 WARDS | Supply of New Office Space 2018
New supply in 2018–2020 is expected to be relatively large at around 200,000 tsubo per year,
while new supply in 2021 is currently forecast at 87,000 tsubo, the smallest since 2008.



Average new supply in 2018–2021 is expected to be 180,000 tsubo per year, exceeding
164,000 tsubo, the annual average of the past 10 years.



65% of new supply in 2018–2021 is concentrated in the three central wards of Chiyoda, Chuo
and Minato.



The ratio of new supply in Tokyo 23 Wards (2018–2021) to office stock at end of 2017 (newsupply rate) is expected to be approx. 5.8% (average of 1.5% per year).

TOKYO 23 WARDS | Office Stock Pyramid 2018


Office stock at end of 2018 is expected to be 12.61 million tsubo on a rentable area basis, withsmall & medium-sized buildings and large buildings accounting for roughly the same amount:
5.94 million tsubo (47%) and 6.68 million tsubo (53%), respectively.

On a number of buildings basis, office stock is 8,899 buildings, of which small & medium-sizedbuildings account for more than 90% (8,162 buildings).



The average age of buildings is 30.0 years for the entire stock, 30.7 years for small &medium-sized buildings, and 23.0 years for large buildings. Aging of stock is more prominent insmall & medium-sized buildings.

Compared to 2000, rentable area increased by approx. 3 million tsubo (approx. 31%), andnumber of buildings rose by approx. 500 (approx. 6%).

TOKYO 23 WARDS | Supply of New Office Space 2018 & Office Stock Pyramid 2018
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 © 2018 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 2018
The new supply of office buildings with a gross floor area of more than 3,000 tsubo is planned to bearound 200,000 tsubo per year in the Tokyo 23 Wards area in 2018–2020, exceeding 164,000 tsubo,
the annual average for 2008–2017 (hereinafter, the “10-year average”) (Figure 1). However, newsupply in 2021 is currently expected to be 87,000 tsubo, the smallest amount since 2008. The annual
average for 2018–2021 is 180,000 tsubo. This exceeds the 10-year average but is roughly equivalent
to 181,000 tsubo, the annual average for 2017–2020, which was released in our previous report*1.
In terms of large buildings with a gross floor area of 10,000 tsubo or more, average new supply in
2018–2021 is expected to be 164,000 tsubo per year, exceeding the 10-year average of 123,000
tsubo per year. A large amount of supply of 222,000 tsubo is planned in 2020.
The new supply rate, which is the ratio of new supply in Tokyo 23 Wards (2018–2021) to office stockat end of 2017, is 5.8% (average of 1.5% per year).
*1 “TOKYO 23 WARDS | Supply of New Office Space 2017 & Office Stock Pyramid 2017” released on December 26, 2016
https://www.xymax.co.jp/english/research/release/161226_2.html

Figure 1: Tokyo 23 Wards Supply of New Office Space (Net Rentable Area)
2008–2017 Average(tsubo)2018–2021 Average

164,000 tsubo
per year

350,000

180,000 tsubo
per year

300,000
275,000
250,000
220,000
200,000

150,000

157,000

111,000 96,000112,000

100,000

151,000

234,000

133,000

117,000

110,000

75,00049,000103,000
83,00058,000 61,000 58,000
41,00035,0000
2008

185,000

222,000
167,000
87,000142,000
151,000
125,000

84,00050,000187,000

177,000 179,000

170,000

169,000

225,000

2009

2010

2011

2012

26,000 26,000

2013

2014

Gross floor area: 3,000–9,999 tsubo

2015

37,00035,00014,000

2016

2017

2018

20,000 3,000 4,000
2019

2021

Gross floor area: 10,000 tsubo or moreTOKYO 23 WARDS | Supply of New Office Space 2018 & Office Stock Pyramid 2018
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 © 2018 Xymax Real Estate Institute Corporation. All rights reserved.

2020

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RESEARCH REPORT｜Xymax Real Estate Institute
By area, 65% of total new supply is planned in the three central wards (Chiyoda, Chuo and Minato).
The highlights of major areas are as follows (Figure 2).
Marunouchi-Otemachi-Yurakucho, the prime office district in central Tokyo, will see the largest
new supply, with 115,000 tsubo. Reconstructions of buildings are continuing in this area due
to a chain of redevelopment projects.



The Toranomon area will see continued supply due to large-scale redevelopments, including
infrastructure developments such as Beltway 2, a new subway station and a Bus Rapid Transit
system, and hotel/medical compound facility developments.

In the Shibaura-Kaigan area, which used to be a non-office district, supply of offices due tolarge-scale redevelopment projects is expected.

Figure 2: New Supply by Area (2018–2021)
0

20,00040,00060,00080,000100,000

120,000(tsubo)Marunouchi-Otemachi-Yurakucho

115,000

Toranomon

83,000

Shibaura-Kaigan

82,000ToyosuHamamatsucho-Shibakoen

56,00041,000Osaki-Kitashinagawa-Nishishinagawa

37,000

Shibuya

36,000

Nihombashi-Yaesu-Kyobashi

35,00020182019

TOKYO 23 WARDS | Supply of New Office Space 2018 & Office Stock Pyramid 2018
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 © 2018 Xymax Real Estate Institute Corporation. All rights reserved.

2020

2021

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RESEARCH REPORT｜Xymax Real Estate InstituteTOKYO 23 WARDS | Office Stock Pyramid 2018
The Office Stock Pyramid follows the method of a population pyramid representing the distribution ofage groups by gender. We classified office buildings with a gross floor area of 300 tsubo or more intolarge buildings and small & medium-sized buildings, and compared the stock (rentable area, numberof buildings) by building age. The pyramid indicates the proportion of large buildings andsmall/medium-sized buildings as well as their age composition.

1. Large Buildings and Small & Medium-Sized Buildings
Office stock of Tokyo 23 Wards as of end of 2018 is expected to be 12.61 million tsubo on a rentablearea basis. Small & medium-sized buildings with a gross floor area of less than 5,000 tsubo and large
buildings with a gross floor area of 5,000 tsubo or more account for roughly the same amount ofstock: 5.94 million tsubo (47% of the entire stock) and 6.68 million tsubo (53%), respectively(Figure 3).
The average building age of the entire stock is 30.0 years. By size of building, the average age of small& medium-sized buildings is 30.7 years, while that of large buildings is 23.0 years. Aging of stock ismore prominent in small & medium-sized buildings.
Figure 3: Tokyo 23 Wards Office Stock Pyramid 2018 (Net Rentable Area)
Tokyo 23 Wards

12.61 million tsubo

8,899 buildings Average building age: 30.0 years

Small & Medium-sized Buildings

70

Large Buildings(Gross floor area: 300–5,000 tsubo)

65(Gross floor area: 5,000 or more)

5.94 million tsubo

6.68 million tsubo

8,162 buildings Age: 30.7 years60

737 buildings Age: 23.0 years

55
Old seismic standards:

1.55 million tsubo (26%)

50

Old seismic standards:

45

1.22 million tsubo (18%)

Aged 20 years or older:35

4.86 million tsubo (82%)

30

Age (years)

40

25

Aged 20 years or older:3.34 million tsubo (50%)

20
15Aged less than 20 years:

10

1.07 million tsubo (18%)

5Aged less than 20 years:

3.33 million tsubo (50%)

0500,000

400,000

300,000

200,000

100,0000

100,000

200,000

300,000

400,000

500,000

Net Rentable Area (tsubo)*The sum totals may not match due to rounding.
TOKYO 23 WARDS | Supply of New Office Space 2018 & Office Stock Pyramid 2018
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 © 2018 Xymax Real Estate Institute Corporation. All rights reserved.

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RESEARCH REPORT｜Xymax Real Estate Institute

In terms of number of buildings, on the other hand, the entire office stock of Tokyo 23 Wards is 8,899
buildings, of which small & medium-sized buildings account for 92% (8,162 buildings) and large
buildings 8% (737 buildings) (Figure 4).

Figure 4: Tokyo 23 Wards Office Pyramid 2018 (Number of Buildings)
Tokyo 23 Wards

8,899 buildings

Small & Medium-sized Buildings

70

Large Buildings(Gross floor area: 300–5,000 tsubo)

65(Gross floor area: 5,000 tsubo or more)

8,162 buildings

60

737 buildings

Old seismic standards:

2,158 buildings (26%)

55
50

Old seismic standards:

45

142 buildings (19%)

Aged 20 years or older:35

7,077 buildings (87%)

30

Age (years)

40

25

Aged 20 years or older:

408 buildings (55%)

20
15Aged less than 20 years:

10

Aged less than 20 years:

1,085 buildings (13%)

5329 buildings (45%)

0
600

400

200

0

200

400

600

Number of Buildings

Many small & medium-sized buildings were completed during the “bubble” economy period (1986–
1997; building age 21–32 years), with more than 80% (4.86 million tsubo) aged 20 years or older.
New supply after the bubble period was few, with only 1.07 million tsubo aged less than 20 years. In
terms of number of buildings, small & medium-sized office buildings aged 20 years or older also
account for a majority, with 7,077 buildings aged 20 years or older, while 1,085 buildings are aged
less than 20 years.
Among large buildings, 3.34 million tsubo of office space are aged 20 years or older, while 3.33 million
tsubo—roughly the same amount of office space as older buildings—are aged less than 20 years. In
terms of number of buildings, 408 buildings are aged 20 years or older, which is slightly more than the329 buildings aged less than 20 years. However, the difference is small, indicating that supply of large
buildings continued after the bubble period.

TOKYO 23 WARDS | Supply of New Office Space 2018 & Office Stock Pyramid 2018
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 © 2018 Xymax Real Estate Institute Corporation. All rights reserved.

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RESEARCH REPORT｜Xymax Real Estate Institute
2. Comparison with 2000
Figure 5 is the office stock pyramid as of 2000. Office stock at end of 2000 was 9.65 million tsubo on
a rentable area basis, of which small & medium-sized buildings accounted for 5.59 million tsubo,
slightly more than large buildings, which accounted for 4.06 million tsubo.
In terms of age, more than 60% of both small & medium and large buildings were aged less than 20
years. In terms of number of buildings, 7,913 (94% of total) were small & medium-sized buildings,
while 496 (6%) were large buildings.
The age of buildings was 16.7 years for the entire office stock, 16.7 years for small & medium-sizedbuildings, and 17.0 years for large buildings. There was no significant difference between large
buildings and small & medium-sized buildings.
Figure 5: Tokyo 23 Wards Office Stock Pyramid 2000 (Net Rentable Area)

Tokyo 23 Wards

9.65 million tsubo 8,409 buildings Average building age: 16.7 years

Small & Medium-sized Buildings(Gross floor area: 300–5,000 tsubo)

5.59 million tsubo

Age: 16.7 years

7,913 buildings

70

Large Buildings

65(Gross floor area: 5,000 tsubo or more)

4.06 million tsubo

60

496 buildings

Age: 17.0 years

55
50
45

Old seismic standards:

Old seismic standards:

40

2.10 million tsubo (38%)

1.65 million tsubo (41%)
Age (years)

35

Aged 20 years or older:30

2.01 million tsubo (36%)

25

Aged 20 years or older:

1.58 million tsubo (39%)

20
15
10

Aged less than 20 years:

Aged less than 20 years:

5

3.58 million tsubo (64%)

2.48 million tsubo (61%)

0500,000

400,000

300,000

200,000

100,0000

100,000

200,000

300,000

400,000

500,000

Net Rentable Area (tsubo)

TOKYO 23 WARDS | Supply of New Office Space 2018 & Office Stock Pyramid 2018
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 © 2018 Xymax Real Estate Institute Corporation. All rights reserved.

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RESEARCH REPORT｜Xymax Real Estate Institute
Figure 6 compares 2000 with 2018. In the entire Tokyo 23 Wards, rentable area of offices increased
by approx. 3 million tsubo (31%) from 2000 to 2018, while the number of buildings increased byapprox. 500 (6%).
In terms of building size, large buildings have seen a certain amount of supply each year even after
the burst of the bubble economy, with rentable area increasing by approx. 65% and the number ofbuildings increasing by approx. 49%. Around half of the buildings are aged 20 years or older, and half
are aged less than 20 years.
On the other hand, the supply of small & medium-sized buildings have remained small after the mass
supply during the bubble period, with rentable area increasing by approx. 6% and the number ofbuildings rising by approx. 3%. As a result, although more than 60% of offices in terms of bothrentable area and number of buildings were aged less than 20 years in 2000, the ratio fell to less than
20% at the end of 2018.
The average age of small & medium-sized buildings rose from 16.7 years to 30.7 years between 2000
and 2018, while that of large buildings rose by only six years, from 17.0 years to 23.0 years.
Figure 6: Tokyo 23 Wards Office Stock Pyramid 2000 and 2018 (Net Rentable Area)
Tokyo 23 Wards
2018: 12.61 million tsubo 8,899 buildings
70

Small & Medium-sized Buildings(Gross floor area: 300–5,000 tsubo)

2000: 9.65 million tsubo

8,409 buildings

Large Buildings

65(Gross floor area: 5,000 tsubo or more)

2018: 5.94 mln tsubo 8,162 buildings

60

2018: 6.68 mln tsubo 737 buildings

2000: 5.59 mln tsubo 7,913 buildings

55

2000: 4.06 mln tsubo 496 buildings

50
45

Mass supply during bubble period(As of 2018)

Age (years)

40
35
30
25

Mass supply in 1994

Mass supply in 2003

20
15
10

Mass supply during bubble period(As of 2000)
500,000

400,000

300,000

200,000

Small & Medium (2000)

Mass supply in 2012

5
0
100,0000

100,000

200,000

Net Rentable Area (tsubo)
Small & Medium (2018)
Large (2000)

300,000

400,000

500,000

Large (2018)

New supply of large buildings is expected to continue, leading to intensified competition. In small &medium-sized buildings, aging is expected to accelerate, giving rise to the need for the developmentof high quality stock, such as through appropriate renewal of facilities and renovation.
TOKYO 23 WARDS | Supply of New Office Space 2018 & Office Stock Pyramid 2018
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 © 2018 Xymax Real Estate Institute Corporation. All rights reserved.

7

RESEARCH REPORT｜Xymax Real Estate Institute

Survey Overview
Supply of New Office Space
Date

November 2017Area

23 wards of Tokyo

Targetproperties

Properties with a gross floor area of 3,000 or more and used mainly as office space(excluding owner-occupied buildings, in principle)

Target data

Rentable office area (tsubo)

MethodPrimarily through publicly available information such as newspaper articles, in addition to
on-site surveys and interviews with operators* The target of this survey is the floor area of buildings to be newly supplied. Note that this is not a complete survey.
* Rentable area represents such area, if published, and if not, the area estimated from gross floor area based on a formula derived from thejoint development with Naoki Kato Lab, Architecture and Architectural Engineering, Kyoto University Graduate School of Engineering.
* The new supply estimated in this survey is the estimated amount as of the date of the survey. The value of new supply changes as
information is added and updated on a daily basis.

Office Stock Pyramid
Date

November 2017Area

23 wards of Tokyo

Targetproperties

Office Stock Pyramid 2018: Office buildings with a gross floor area of 300 tsubo or more,
completed (or scheduled to be completed) in or after 1946, and used mainly as officespace as of end of 2018
Office Stock Pyramid 2000: Office buildings with a gross floor area of 300 tsubo or more,
completed in or after 1946, and used mainly as office space as of end of 2000 (includes
properties that were demolished between 2001 and 2017)

Target data

The number and rentable office area (tsubo) of large and small & medium-sized officebuildings.
Large buildings: Gross floor area of 5,000 tsubo or more
Small & medium-sized buildings: Gross floor area of 300–4,999 tsubo* The collected data were aggregated from properties whose date of construction is known based on publicly available information such as
newspaper articles and for-rent information (including past information). Owner-occupied buildings have been excluded, in principle.
* The data of reconstructed or demolished buildings have been collected and reflected to the extent possible.
* Figures of this survey are the aggregated amount as of the date of the survey. Since information is added and updated on a daily basis, any
difference from figures published last year is not necessary due to new construction or demolition.
* The office stock in 2018 includes buildings whose scheduled completion date is known as of November 2017.
* Rentable area represents such area, if published, and if not, the area estimated from gross floor area based on a formula jointly developedwith Naoki Kato Lab, Architecture and Architectural Engineering, Kyoto University Graduate School of Engineering.
* “Old seismic standard” buildings refer to buildings constructed with the design method before the enforcement of the Revised Seismic
Design Method of 1981. In this report, they refer to buildings completed in and before 1981.

TOKYO 23 WARDS | Supply of New Office Space 2018 & Office Stock Pyramid 2018
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 © 2018 Xymax Real Estate Institute Corporation. All rights reserved.

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