Xymax Real Estate Institute

RESEARCH REPORT

Metropolitan Areas Office Demand Survey 2017
— Demand Trends
Demand for office space is changing. Capture the trends.

August 2, 2017

Employing different types of workers and improving productivity are urgent matters facing companies in Japan;
the lack of labor from working-age population decline is a nationwide problem. More companies are starting toallow employees to be flexible on where and when to work. This trend will impact the office space demand. For
example, the required size of office, the preferred location and the way of using the office space may bedifferent in the future.
Xymax Real Estate Institute started a survey on a regular basis in 2016 on how companies are using officespaces and how people work. The purpose of the survey is to study the impact of such trends on office spacedemand. This issue covers the results of our second survey.
Reference: "Metropolitan Areas Office Demand Survey 2016 – Demand Trends", released on January 12, 2017https://soken.xymax.co.jp/2017/01/12/1701-office_demand_survey_2016/ (available only in Japanese)

Summary of Survey Results
1.

Office Space Demand Change April 2016 – March 2017 (Page 2 – Page 7)
Demand is strong. "Increase" and "expand" exceeded "decrease" and "downsize".
Number of office workers: Increased (37.6%) Decreased (12.9%)
Size of office space:
Expanded (7.9%)
Downsized (2.0%)
Figure 1
 Similar result for rent per tsubo (incl. CAM): Increased (14%) Decreased (2.6%)
 Office expansion and rent increase were prominent in telecommunication industries and companies
having office in Tokyo 23 Wards.
 Still, 31.6% of the companies think their current office is not large enough.

2.

Alternative Workspaces Are Becoming More Available (Page 8 – Page 10)
Telework spaces are available at 30% of the companies.
More companies are allowing employees to use alternative workspaces: Work-from-homeprogram (12.6%), satellite office, serviced office, etc.
Figures 10, 11
 Larger companies have high tendency of having satellite office while work-from-home programs arealso becoming popular at small companies employing up to 99 workers.
 Offices in Tokyo 23 Wards are more active in promoting telework than other metropolitan areas.

3.

Outlook – Office Space Demand (Page 11 – Page 15)
Demand will remain strong. "Increase" and "expand" exceeded "decrease" and "downsize".
Number of office workers in near future: Increase (34.3%) Decrease (4.8%)
Size of office space in near future:
Expand (17.2%)
Downsize (3.8%)
Figure 15

4.

What Companies Expect from Large Volume of New Completions Starting in 2018 (Page 16 – Page 17)"More opportunities to lease spaces under preferable terms" said 45.2% of the companies inGreater Tokyo. There is a possibility of active office relocations starting in the next fiscal year.
Figure 23

Metropolitan Areas Office Demand Survey 2017 — Demand Trends
All the contents are as of the date of this report. Xymax Corporation does not guarantee the accuracy or completeness of the information herein.
Copying, quoting, forwarding, distributing, reprinting or any other use of this report is not allowed without prior permission from Xymax Real
Estate Institute Corporation.
Copyright © 2017 Xymax Corporation. All rights reserved.

1

RESEARCH
H REPORT
T｜Xymax Reeal Estate Innstitute

1. Officce Spacee Demaand Change April 2016
6 – Marcch 20177
1-1. Nummber of Officee Workers, Size of Office and Rent pe
er Tsubo (Incl. CAM Chargge)

Of tthe companiees, 37.6% said that the nnumber of officeoworkers at their coompany has increased.
h decreased
This is larger than 12.9% of the companiees that said the number hasd.

es, 7.9% saidd that they hhave expanded their office. This is laarger than 2.0% of theOf the companie
mpanies that saidsthey havve downsizedd their office.
com



Of th
he companiees, 14.0% saidd that their rrent per tsubo has increassed.

The changess in the numbber of office workers,w
sizee of office spa
ace and rent per tsubo inncluding CAM
M charge ove
erthe year starrting April 20
016 and ending March 20017 are show
wn in Figure 1.
1
The numberr of office woorkers has a greatg
impact on office deemand. The companiescthhat had an in
ncrease in theenumber of w
workers far exxceeded the companies tthat had a deecrease in thee number byy 24.7 points. Similarly, theecompanies that expandeed (or decided to expand)) the office exceededethe companies tthat downsizzed the officeeby 5.9 pointts. The companies that had an increease in rent per tsubo exceeded thhe companiees that had adecrease in rrent per tsub
bo by 11.4 pooints.
This trend m
may be one of the facto
ors of the grrowing officee space dem
mand and lim
mited availabbilities in theemetropolitann areas. The survey also indicates th
hat some companies add
ded workers without exp
panding theiroffice space because thee number of companiescthhat expanded
d the office spaces
was smmaller than th
he number ofocompanies that had an in
ncrease in the number off office worke
ers. Such situation was alsso observed in the surveyy
in 2016.
C
in O
Office Space April 2016 – March 201
17
Figure 1: Changes(Single answer, n=1,073
3)
Metropolitan A
Areas Office De
emand Survey 2017 — Demannd Trends
All the contents aare as of the date ofo this report. Xym
max Corporation ddoes not guarante
ee the accuracy or completeness of the information herein.
h
Copying, quotingg, forwarding, disttributing, reprintin
ng or any other u se of this report is not allowed witthout prior permiission from Xymaxx Real
Estate Institute Co
orporation.
Copyrigh
ht © 2017 Xymax Corporation. All rights reserved.

2

RESEARCH
H REPORT
T｜Xymax Reeal Estate Innstitute1-2. Chang
ge in Size of Office (Detaiils)

Top tw
wo expansion types weree "relocation"" (43.5%) andd "expansion in the same building" (37.6%).
The m
most popularr purpose was "added wo
orkers and offfice became too small" (664.7%).

In thee type of dow
wnsizing, "relocation" (38..1%) exceede
ed "downsize
e in the samee building" (333.3%).
The m
most popularr purpose was "to cut thee cost of officce" (61.9%).

Companies tthat expandeed their officce were moree likely to haave relocated to other plaace than exp
panded in theesame buildinng (Figure 2).
2 Likewise, companiescth
hat downsize
ed their offic
ce were more
re likely to haave relocateddthan downsiized in the sa
ame buildingg (Figure 3) . The office spacesmarket is tight. So
ome companies may haveegiven up theeir initial plann to expand ini the same bbuilding due
e to lack of av
vailability. Otther compan
nies may haveedecided to reelocate beca
ause their lan
ndlord wante d a rent increease when re
enewing the existing leasse.
The purpose
es of expansio
on show that companies are positive in keeping employees;e"aadded worke
ers and officeebecame too small" (64.7
7%) and "enhance recruiiting and hirre more" (422.4%) topped
d the rank. "To" make theeoffice more ccomfortable"" (32.9%) mooved one ran k up from th
he fourth plac
ce in the prevvious year, inndicating tha
atcompanies aare more inte
erested than before in ho
ow the office environmentt influences w
workers (Figure 4). In theedownsizing p
purposes, "too cut the cosst of office" (661.9%) took thet first place again (Figu
ure 5).
Figu
ure 2: Type ofo Expansionn (n=85)

Figure 3: TypeT
of Dow
wnsizing (n==21)

Figurre 4: Purpose
e of Expansiion (n=85)

Figure 5: PurposePof D
Downsizing (n=21)(Figurees 2 to 5: Multiple answers)(*1)

Open new office: It means, in this repo
ort, to open a neew office in the same building wherew
the comppany was.

other main office. A sub-office is
i located close to the main offfice(*2) Sub-offfice: A separate office of the headquarters or oand it hhandles part of thet functions off the main officee.
Metropolitan A
Areas Office De
emand Survey 2017 — Demannd Trends
All the contents aare as of the date ofo this report. Xym
max Corporation ddoes not guarante
ee the accuracy or completeness of the information herein.
h
Copying, quotingg, forwarding, disttributing, reprintin
ng or any other u se of this report is not allowed witthout prior permiission from Xymaxx Real
Estate Institute Co
orporation.
Copyrigh
ht © 2017 Xymax Corporation. All rights reserved.

3

RESEARCH
H REPORT
T｜Xymax Reeal Estate Innstitute1-2. Change
e in Size of OfficeO(Details)
Some companies did
d not expannd or downs ize their officce but had ann intention too do so.
Of the companies, 7.7% said th
he office expaansion plan is either now under discuussion or wass
discusssed before but
b discontinu
ue or stoppeed.

Of the companies that had no offiice size channge in the past 12 months, 7.7% aare either discussing theeexpansion plan now or havinghdiscusssed it in thee past but deecided to disccontinue or sstop the plann. This meansthat there w
was a poten
ntial for offiice expansio
on. If such potential expansions arere combined
d with actuaalexpansions, the percenta
age of the coompanies goees up to 15.6
6% (Figure 6).
The office doownsizing pla
an is discusse
ed by 1.7% oof the companies now andd was discusssed but declined by 0.4%%.
If such poten
ntial downsizzings are com
mbined withh actual down
nsizings, the percentage of the comppanies will bee
4.1% (Figuree 6).
A similar situ
uation was obbserved in th
he survey in 22016 too; theere was a pottential for soome companies to changeethe size of office.
Figu
ure 6: Chang
ge in Size off Office Overr the Year (AActual + Pottential)

Office size did not ch
hange

Total
15.6%

Office size did not change

Total
4.1%

(Single answer, n=1,073
3)

Metropolitan A
Areas Office De
emand Survey 2017 — Demannd Trends
All the contents aare as of the date ofo this report. Xym
max Corporation ddoes not guarante
ee the accuracy or completeness of the information herein.
h
Copying, quotingg, forwarding, disttributing, reprintin
ng or any other u se of this report is not allowed witthout prior permiission from Xymaxx Real
Estate Institute Co
orporation.
Copyrigh
ht © 2017 Xymax Corporation. All rights reserved.

4

RESEARCH
H REPORT
T｜Xymax Reeal Estate Innstitute1-3. Channge in Rent per
p Tsubo (Details)

Of tthe companies that exp
panded the o% had an increase in reent per tsubbo. Of theoffice, 41.2%
com
mpanies that downsizeddth
he office, 33..3% had an in
ncrease in rent per tsuboo.

The rent per tsub
bo also incre
eased for 11.88% of the companies that had no chaange in size ofo office.

Of the comppanies that havehexpanded the officee, the compa
anies that ha
ad a rent inccrease exceed
ded both theecompanies that had a rent decrease anda the commpanies that had
h no change in rent. Siimilarly, of th
he companies
that had no change in sizze of office, thet companiees that had a rent increasse exceeded tthe companiies that had arent decreasse by 10.7 pooints (Figure 7). These treends were also observed in the surveey in 2016, indicating thatt,while the vaccancy rates area constantlly on the low
w level, the reents are incre
easing not oonly in newly-signed leaseebut also in e
existing lease.
gure 7: Change in Size oof Office andd Change in Rent per Tsu
ubo
Fig(Single(answerr)

Metropolitan A
Areas Office De
emand Survey 2017 — Demannd Trends
All the contents aare as of the date ofo this report. Xym
max Corporation ddoes not guarante
ee the accuracy or completeness of the information herein.
h
Copying, quotingg, forwarding, disttributing, reprintin
ng or any other u se of this report is not allowed witthout prior permiission from Xymaxx Real
Estate Institute Co
orporation.
Copyrigh
ht © 2017 Xymax Corporation. All rights reserved.

5

RESEARCH REPORT｜Xymax Real Estate Institute
PICK UP
Change in Size of Office and Rent per tsubo by Company TypeThe analysis by type of companies (size of companies, industries and location of the office) showed different
result in the office expansion/downsizing and rent increase/decrease trends.
Figure 8 shows the two types of diffusion index (DI) in one chart based on the changes in the year starting
April 2016 and ending March 2017: Office Size DI, which was calculated by subtracting the percentage ofcompanies that downsized the office from the percentage of companies that expanded the office; and theRent DI, which was calculated by subtracting the percentage of companies that had a decrease in rent fromthe percentage of companies that had an increase in rent.
▲ By Size of Company (Number of Employees)
The differences were small, indicating that office demand is growing regardless of the size of companies.
◆ By Industry
In telecommunication and real estate and lease of goods industries, the DI for office expansion andincrease in rent were both high. Both were relatively low for manufacturing and service industries.
Financial and insurance industries had high DI in the survey in 2016 but the DI had somewhat slowed thisyear.
● By Location of Office
The DI for office expansion and increase in rent were both high in Tokyo 23 Wards while they wererelatively low in Osaka and Nagoya cities.
Figure 8: Office Size DI and Rent DI (both are the changes in the past)

Rent DI

Companies Had Rent Increase (%) minus
Companies Had Rent Decrease (%)

25

Telecommunications

20

Employees: 1,000 and up

15

Academic research,
professional or
technological service

10

Manufacturing

Tokyo 23 Wards
Employees: 100-999

Real estate
Leasing of goods

Wholesales, retail
Employees: up to 99
Finance, insurance
Construction
Service

Nagoya city

5

Osaka city

0
0

2

4

6

8

10

12

14

16

Office Size DI
Companies Expanded Office (%) minus Companies Downsized Office (%)

Metropolitan Areas Office Demand Survey 2017 — Demand Trends
All the contents are as of the date of this report. Xymax Corporation does not guarantee the accuracy or completeness of the information herein.
Copying, quoting, forwarding, distributing, reprinting or any other use of this report is not allowed without prior permission from Xymax Real
Estate Institute Corporation.
Copyright © 2017 Xymax Corporation. All rights reserved.

6

RESEARCH
H REPORT
T｜Xymax Reeal Estate Innstitute1-4. Approopriate Officce Size / Econ
nomic Sentim
ment


Of th
he companiess, 31.6% think their curre nt office is not large enough.



Of th
he companies, 31.8% thin
nk the curren
nt economy is, comparedd to before, ""good" or "ssomewhat
goodd" while 18.8% think it is "poor" or "soomewhat pooor".

We asked the responden
nts about thee size of theirr current officce. Of them, 31.6% said tthe office is "too"small" oro"somewhat small". This is larger than the perccentage of companiescth
hat said thee office is "ttoo large" oro"somewhat large" (16.8%%). This can be looked as tthere is a potential dema
and for officee expansion. (Figure 9)
Companies' economic sentimentsca
an also influ
uence the de
emand for officeospace.. More than 30% of theecompanies ssaid the curreent economy
y is "good" oor "somewha
at good" commpared to beefore, exceed
ding 18.8% ofothe companiies that said it is "poor" oro "somewha t poor" (Figu
ure 9).
The survey rresults for thee appropriate
e office size aand econom
mic sentimentt were the sa me as the su
urvey in 2016
6;indicating th
hat a stable officeospace demanddis likkely to contin
nue.

Figure 9: Appropriatee Office Sizee / Economic Sentimentt(Single ansswer, n=1,073
3)

Metropolitan A
Areas Office De
emand Survey 2017 — Demannd Trends
All the contents aare as of the date ofo this report. Xym
max Corporation ddoes not guarante
ee the accuracy or completeness of the information herein.
h
Copying, quotingg, forwarding, disttributing, reprintin
ng or any other u se of this report is not allowed witthout prior permiission from Xymaxx Real
Estate Institute Co
orporation.
Copyrigh
ht © 2017 Xymax Corporation. All rights reserved.

7

RESEARCH
H REPORT
T｜Xymax Reeal Estate Innstitute

2. Alterrnative WorkspWpaces Arre Becoming More
M
Avaailable
2-1. Approoach to Prom
mote Telework (*1)
Of thee companiess, 30% said th
hey allow em
mployees to workw
at somee sort of telew
work spaces..

"Workk-from-homee programs" are the mosst popular tellework (12.6%%).
"Satellite office orr other simila
ar facility ow ned or leased by compan
ny (*2)" and "sserviced officce, shared(officee, or other sim
milar facility (*3)
" are moree available th
han a year ago.

To understannd how companies are prromoting tel ework, we assked compan
nies whetherr they have workspaces
woor
programs fo
or employeess to do telew
work other th
han the regu
ular offices lik
ke headquarrters, branch offices, sales
offices and ssub-offices.
Of the respo
ondents, 70%% said that they have nothhing of that kindkwhile soome sort of teelework is av
vailable at theeremaining 3
30% (Figuree 10). The most popullar telework
k type givenn by 12.6% of the com
mpanies was"work-from--home prograams". Compa
ared to the s urvey in 2016, "satellite officeoor otheer similar facility owned or(*2)
leased by coompanies " (6.0%) and "serviced offfice, shared office or other similar faacility manag
ged by officeeservice provviders (*3)" (5.6%) increa
ased by 1-22 points eacch, making the combinned teleworkk other thann"working-fro
om-home pro
ograms" to 21.8%
2(Figurre 11). Thesee results illusstrate that allternative wo
orkspaces areeslowly becom
ming more available resp
ponding to th
he recent boo
om in changing the way w
we work.
Figure 10:
Does the coompany allow
w employee
es to
do some sort of telewo
ork?

Figuree 11: What area such teleework spacees?

(Single ansswer, n=1,073)((Multiple answ
wers, n=1,073))(*11) Telework: Fle
exible way of wo
orking, regardleess of time and place, made possible by usingg information andacommunication technology (ICT).
(*22) Satellite officee: An office equipped the samee as main office.. The location is decided considdering the commmutingand travelingg convenience ofo the employeees. It is most likeely located near train stations orr outskirts of the city.
(*33) In this report,, whether the chharge of using t he space is paidd monthly or hourly does not m
matter.

Metropolitan A
Areas Office De
emand Survey 2017 — Demannd Trends
All the contents aare as of the date ofo this report. Xym
max Corporation ddoes not guarante
ee the accuracy or completeness of the information herein.
h
Copying, quotingg, forwarding, disttributing, reprintin
ng or any other u se of this report is not allowed witthout prior permiission from Xymaxx Real
Estate Institute Co
orporation.
Copyrigh
ht © 2017 Xymax Corporation. All rights reserved.

8

RESEARCH
H REPORT
T｜Xymax Reeal Estate Innstitute
Their initiativves varied deepending on the size of tht office is loocated.
he company and where the
By companyy size, the large companie
es are more likely to havee "satellite offfice or otherr similar facility owned oroleased by th
he company" and "service
ed office, shaared office, oro other similar facility mmanaged by office serviceeproviders". H
However, "wwork-from-ho
ome programms" are also becoming moremavailabble at smalle
er companies
employing u
up to 99 em
mployees (10..9%). Having
g satellite offfices is costly
y but a workk-from-home program iseasier (it cann be done byy setting rules) and may ssuit the best for smaller companies wiith quick deccision makinggculture (Figuure 12).
By office loccation, of all the three majormmetroppolitan areas in Japan, To
okyo 23 Warrds was the toptin all theetelework typpes, showing that there is a gap betweeen regions ini pursuing teleworkt(Figgure 13).
work Spaces – By Compa
any Size
Figure 12: Telew

Figurre 13: Telewo
ork Spaces – By Office Location
L(Figures 12, 113: Multiple annswers, extractt)Metropolitan A
Areas Office De
emand Survey 2017 — Demannd Trends
All the contents aare as of the date ofo this report. Xym
max Corporation ddoes not guarante
ee the accuracy or completeness of the information herein.
h
Copying, quotingg, forwarding, disttributing, reprintin
ng or any other u se of this report is not allowed witthout prior permiission from Xymaxx Real
Estate Institute Co
orporation.
Copyrigh
ht © 2017 Xymax Corporation. All rights reserved.

9

RESEARCH
H REPORT
T｜Xymax Reeal Estate Innstitute
By industry, telecommun
nication companies show
wed relativelyy high percen
ntage in all tthe three teleework spaces
with a particcularly high percentage in "work-fro m-home pro
ogram" at 27
7.7%. Manufaacturing com
mpanies wereethe highest aamong all th
he industry ty
ypes in the uuse of "serviced office, shared office aand similar kinds" at 8.9%%.
This is probaably because
e manufacturring compan
nies hire manny sales repre
esentatives w
who are frequently out ofooffice and also because suchscompannies are likelyy to be big co
ompanies with money to spend (Figuure 14).
Compared too the surveyy in 2016, pa
articularly larrge increasess in teleworkk availability w
were observ
ved in serviceecompanies aand manufaccturing companies: "Sateellite office or other sim
milar facility owned or leeased by theecompany" byy 2.6 points anda 1.5 pointts, respectiveely; and "servviced offices, shared officees, or other similarsfacilityy
managed byy office servicce providers"" by 4.7 pointts and 3.7 pooints, respecttively.

Figure 14: Tellework Spacces – By Indu
ustry

*Se
ervice (those noot classified to otherosector)(Multiple annswers, extractt)Metropolitan A
Areas Office De
emand Survey 2017 — Demannd Trends
All the contents aare as of the date ofo this report. Xym
max Corporation ddoes not guarante
ee the accuracy or completeness of the information herein.
h
Copying, quotingg, forwarding, disttributing, reprintin
ng or any other u se of this report is not allowed witthout prior permiission from Xymaxx Real
Estate Institute Co
orporation.
Copyrigh
ht © 2017 Xymax Corporation. All rights reserved.

100RESEARCH
H REPORT
T｜Xymax Reeal Estate Innstitute

3. Outlo
ook – OfficeO
Sppace Demand
3-1. Outloook – Number of Office Workers
W
and Size of OfficceOf the companiess, 34.3% saidd they will hhire more, faar exceeding 4.8% of thee companies that thenumb
ber of employyees will deccrease.

Similaarly, 17.2% ofo the companies said th
hey intend tot expand th
he office, exxceeding 3.8%
% of thecomppanies that sa
aid they inte
end to down size the officce. This indic
cates that th e strong dem
mand forofficee space will coontinue.

We asked thhe companies about how
w the numberr of office woorkers at theeir current offfice will be in one or twooyears' time. O
Of the comppanies, 34.3%% said the nu mber will inccrease, consid
derably abovve 4.8% of th
he companies
that said thee number willl decrease. The
T companiies were alsoo asked abou
ut how the siize of the offfice will be inn
two or three years' tim
me. Of them,, 17.2% saidd they intend to expand
d the office,, exceeding 3.8% of theecompanies that said theyy intend to do
ownsize it. Baased on thesse results, whhich were sim
milar to the su
urvey in 20166,
the strong demand for officeois expeccted to contiinue (Figure 15).
Figure 15: Number of Office Workkers and Sizee of Office in Near Futu
ure (Intentioon)(Single ansswer, n=1,073
3)

Metropolitan A
Areas Office De
emand Survey 2017 — Demannd Trends
All the contents aare as of the date ofo this report. Xym
max Corporation ddoes not guarante
ee the accuracy or completeness of the information herein.
h
Copying, quotingg, forwarding, disttributing, reprintin
ng or any other u se of this report is not allowed witthout prior permiission from Xymaxx Real
Estate Institute Co
orporation.
Copyrigh
ht © 2017 Xymax Corporation. All rights reserved.

11
1

RESEARCH
H REPORT
T｜Xymax Reeal Estate InnstituteOf the comppanies that in
ntend to expa
and the officee, approxima
ately 60% said the type oof expansion is "expansion
nin the same building" (Fiigure 16). Ass mentioned,, however, in 1-2. Change in Size of Office (Detaails) (Page 3)),many compaanies had to relocate to otheroplace wwhen expand
ding their offiice. Even if coompanies wiish to expanddat their curreent building, it is probably not possib
ble now.
The purpose
e of intention
n to expand was
w the samee as those off companies that had alreeady expanded the officee:"hired more workers and the office beecame too smmall" (58.4%)) was the top
p, followed byy "enhance recruiting anddhire more" (449.7%) and "make the offfice more com
mfortable" (338.4%) (Figure 18).
Figure 16: Intention tot Expand by Type (n=1885)

FigureF
17: Inntention to D
Downsize byy Type (n=411)

Figure 18
8: Purpose off Intention tot Expand (nn=185) Figu
ure 19: Purpose of Intenntion to Dow
wnsize (n=411)(Figurres 16-19: Multiple answers)(*1) Sub-offfice: A separate office of the hea
adquarters or o ther main officee. A sub-office iss located close tto the main officce and it handle
espart of the functions off the main officee.
(*2)

new office: It meeans, in this repo
ort, to open a neew office in the same building wherew
the comppany was.
Open nMetropolitan A
Areas Office De
emand Survey 2017 — Demannd Trends
All the contents aare as of the date ofo this report. Xym
max Corporation ddoes not guarante
ee the accuracy or completeness of the information herein.
h
Copying, quotingg, forwarding, disttributing, reprintin
ng or any other u se of this report is not allowed witthout prior permiission from Xymaxx Real
Estate Institute Co
orporation.
Copyrigh
ht © 2017 Xymax Corporation. All rights reserved.

122

RESEARCH REPORT｜Xymax Real Estate Institute

PICK UP
Size of Office by Company Type – Change in the Past and Near Future
Figure 20 shows the Office Size Diffusion Index (DI) in the past (subtracting the percentage of companies
that downsized the office in the fiscal year starting April 2016 from the percentage of companies that
expanded the office) and the Office Size DI in the near future (subtracting the percentage of companies that
intend to expand the office from the percentage of companies that intend to downsize the office).
▲ By Size of Company (Number of Employees)
The companies employing 1,000 or more have weaker intention to expand the office in the near futurethan the companies employing up to 999.
◆ By Industry
Real estate and lease of goods companies and telecommunication companies showed strong demand for
office space both in the past and in the near future. Service companies' office expansion is moving only
slowly but their intention to expand is strong. Manufacturing companies, however, showed relatively weakinterest in office expansion both in the past as well as in the near future.
● By Location of Office
The companies in Tokyo 23 Wards showed relatively strong demand for office space in the past as well as
in the near future. However, in Osaka city, the demand was relatively weak in the past and will remain so in
the near future too.

Office Size DI (Near Future)

Companies Intend to Expand Office (%) minus
Companies Intend to Downsize Office (%)

25

Figure 20: Office Size DI (Change in the Past and Near Future)
Real estate,lease of goods

Service20

Telecommunications
Employee: 100-999
Employee: Up to 99

15

10

Nagoya city
Manufacturing

Academic research,
professional or
technical service

Osaka city

5

Tokyo 23 Wards
Construction

Finance, insurance

Wholesale, retail

Employee: 1,000 and up
0
0

2

4

6

8

10

12

14

16

Office Size DI (Past)
Companies Expanded Office (%) minus Companies Downsized Office (%)

Metropolitan Areas Office Demand Survey 2017 — Demand Trends
All the contents are as of the date of this report. Xymax Corporation does not guarantee the accuracy or completeness of the information herein.
Copying, quoting, forwarding, distributing, reprinting or any other use of this report is not allowed without prior permission from Xymax Real
Estate Institute Corporation.
Copyright © 2017 Xymax Corporation. All rights reserved.

13

RESEARCH
H REPORT
T｜Xymax Reeal Estate Innstitute3-2. Conceerns and Obsstacles in Imp
plementing O
Office StrateggyCost-related conccerns and ob
bstacles suchh as "heavy cost"c(41.8%)) and "uncleaar cost effecctiveness"(31.1%%) ranked hig
gh on the list.

Regarding th
he concerns or obstacless in implemeenting officee strategy, more than 40%% of the companies saiddthey feel thee cost is hea
avy, which wa
as also the mmost popular response in the surveyy in 2016 (322%). The cosst
related conccerns and obsstacles dominated the to
op places: "unnclear cost effectiveness"" at the seconnd place; andd"risk of rentaal increase" ata the fourth place (Figurre 21).

Figure 21: WhatW
are thee concerns oor obstacless in impleme
enting the of
office strateg
gy?

((Multiple answ
wers, n=1,073
3)

Metropolitan A
Areas Office De
emand Survey 2017 — Demannd Trends
All the contents aare as of the date ofo this report. Xym
max Corporation ddoes not guarante
ee the accuracy or completeness of the information herein.
h
Copying, quotingg, forwarding, disttributing, reprintin
ng or any other u se of this report is not allowed witthout prior permiission from Xymaxx Real
Estate Institute Co
orporation.
Copyrigh
ht © 2017 Xymax Corporation. All rights reserved.

14
4

RESEARCH
H REPORT
T｜Xymax Reeal Estate Innstitute

PICK U
UP
Officee Space pe
er Person b
by Compa
any's Telew
work Availlability
The size of office space per person ofo companiess that allow employeesetoo do teleworrk was differeent fromthat of the companies that do not allow teleworrk (Figure 22
2).
In all the four major teleeworks, the companies al lowing employees to do telework havve a smaller officeospace
per person than the com
mpanies not allowing teleework. It is probablypbecaause the form
mer companies
achieved ann efficient usse of office sp
pace since th
he telework enabledeemployees to wo
ork at differen
nt places.
Figuree 22: Office SpaceS
per Peerson by Co
ompany's Telework Avaiilability
1 tsubo = 3.3 sqm((*1) Satellite offfice: An office equippedethe ssame as main office.
o
The location is decidedd considering thhecommutingg and traveling convenience off the employeess. It is most likeely located nearr train stations or
outskirts off the city.
((*2) In this reporrt, whether the chargecof using the space is paid monthly or hourly does not matter.

Metropolitan A
Areas Office De
emand Survey 2017 — Demannd Trends
All the contents aare as of the date ofo this report. Xym
max Corporation ddoes not guarante
ee the accuracy or completeness of the information herein.
h
Copying, quotingg, forwarding, disttributing, reprintin
ng or any other u se of this report is not allowed witthout prior permiission from Xymaxx Real
Estate Institute Co
orporation.
Copyrigh
ht © 2017 Xymax Corporation. All rights reserved.

15
5

RESEARCH REPORT｜Xymax Real Estate Institute

4. Topics: What Companies Expect from Large Volume of New
Completions Starting in 2018
Many large office buildings will be completed one after another starting in 2018 in central Tokyo*. Today, themarket suffers low vacancy rate and limited availability. How Greater-Tokyo companies see the newcompletions in the pipeline. The companies gave their opinions on how the office market will be from FY2018
on and revealed their office strategy for FY2017.
*Reference: TOKYO 23 WARDS | Supply of New Office Space 2017 & Office Stock Pyramid 2017" December 26, 2016
https://www.xymax.co.jp/english/research/images/pdf/20161226_2.pdf

Of the companies that have office in Tokyo, Kanagawa, Saitama or Chiba, 45.2% said the newcompletions are likely to provide them with more opportunities to lease buildings under preferable
lease terms and conditions.

As their office strategy for FY2017, 14.0% said they will just wait for now; they are likely to plan theoffice relocation or expansion in FY2018 or later.

Of the companies having office in Greater Tokyo, 45.2% said, as the personal opinion of the respondents, thatthe new supply will give them more opportunities to lease buildings under preferable lease terms. The
percentage was almost equal to that of those who said there will be probably no impact (45.8%) (Figure 23).
When asked about their office strategy for FY2017 (the fiscal year ending March 2018), 14.0% said they will wait
until FY2018 to plan the relocation or expansion while 10.6% said they have already started the planning(Figure 24). Companies are willing to expand their offices but since there are limited availabilities now, they
have no way but to wait. The new completions will not only increase the number of new available spaces but
also add spaces formerly occupied by companies that decided to relocate to new buildings. If theformerly-occupied spaces can be leased under preferable terms and conditions, more companies may decideto relocate.
On the other hand, there are concerns on whether the demand continues to grow in line with the expanding
new supply.
For example, Figure 20 shows that large companies employing 1,000 or more have weak intention to expand in
the near future compared to other companies. However, if they notice new completions of large-floor buildings,
some companies may think about consolidating their separate offices. Such office consolidations of large
companies may lead to achieving the efficient use of office space.
Another factor that may impact the demand is the size of office space per person which is becoming smaller asalternative workspaces are becoming more available (Figure 22). If work-from-home programs and third place
offices will be more available in the future, the office spaces within the headquarters or other traditional offices
may become smaller because employees can work at different spaces. It is important to pay attention to new
ways of work and other social issues that can impact the office space demand.
Metropolitan Areas Office Demand Survey 2017 — Demand Trends
All the contents are as of the date of this report. Xymax Corporation does not guarantee the accuracy or completeness of the information herein.
Copying, quoting, forwarding, distributing, reprinting or any other use of this report is not allowed without prior permission from Xymax Real
Estate Institute Corporation.
Copyright © 2017 Xymax Corporation. All rights reserved.

16

RESEARCH
H REPORT
T｜Xymax Reeal Estate Innstitute

Figure 23
3: Impact of New Complletions in Grreater Tokyoo(Single annswer, n=708)(Responden
nts: companie
es having office
e in Tokyo, Ka nagawa, Saitama and Chibaa)Figure 24:
2 Companiies' Office Sttrategy for FY2017 (Yeaar Ending M arch 2018)(Multiple answers, n=708)(R
Respondents: ccompanies ha
aving office inn Tokyo, Kanaagawa, Saitam
ma and Chibaa)

Metropolitan A
Areas Office De
emand Survey 2017 — Demannd Trends
All the contents aare as of the date ofo this report. Xym
max Corporation ddoes not guarante
ee the accuracy or completeness of the information herein.
h
Copying, quotingg, forwarding, disttributing, reprintin
ng or any other u se of this report is not allowed witthout prior permiission from Xymaxx Real
Estate Institute Co
orporation.
Copyrigh
ht © 2017 Xymax Corporation. All rights reserved.

17
7

RESEARCH REPORT｜Xymax Real Estate Institute

Survey Overview
TimingJune 2017

TargetRespondents

3,267 companies• Companies that are tenants of office buildings managed by Xymax Group• Client companies of XYMAX INFONISTA Corporation

Effective
Responses

1,073 companies

GeographicalCoverage

Prefectures in Japan (Tokyo, Osaka, Aichi, Fukuoka, Kanagawa, Saitama, Chiba and others)

Distribution

Either by email or questionnaire sheet

Response rate: 33％

Current office•
Location, contracted area, number of office workers, appropriate size or not,rent per tsubo
How the office is used, how the use has changed (April 2016 – March 2017)•
How is the office layout, how it has changed•
Where office workers work, how it has changed
Office space demand change (April 2016 – March 2017)•
Change in number of office workers•
Change in size of office, what types of change, what are the reasons•
Change in rent per tsubo
TopicsCovered in
SurveyOutlook of office space demand•
Economic sentiment•
Number of office workers•
Intention to expand/downsize, what types of expansion/downsizing, what are the reasons•
Future office strategy, what are important, what are the concerns and obstacles
Large volume of new completions starting in 2018•
Projection of possible impact on office market•
Companies' office strategy for FY2017
Profile of company•
Industry, place of headquarters, number of employees, year of incorporation
Profile of respondents•
Division, position, age

Metropolitan Areas Office Demand Survey 2017 — Demand Trends
All the contents are as of the date of this report. Xymax Corporation does not guarantee the accuracy or completeness of the information herein.
Copying, quoting, forwarding, distributing, reprinting or any other use of this report is not allowed without prior permission from Xymax Real
Estate Institute Corporation.
Copyright © 2017 Xymax Corporation. All rights reserved.

18

RESEARCH REPORT｜Xymax Real Estate InstituteProfile of Respondent Companies(Upper row: %Lower row: number)

Industry
Service(those not classified
to other sector)

Wholesale /RetailManufacturing

19.7%
211

16.8%
180

Real estate /Leasing of goods

Financial /Insurance

4.7%
50

Multi-service
business

Academic research /Professional or
technical service

13.1%
141

7.1%
76

16.1%
173

Transportation /Postal service

Unclassified
4.2%
45

2.4%
26

Accommodation /Food & beverage
service

Daily life services /Entertainment

0.8%
9

0.8%
9

1.5%
16

Telecommunications

Medical /Welfare2.1%
23Electricity, Gas,
Heat, Water

Construction
6.2%
66
Education /Learning support

1.6%
17

1.6%
17

Civil service (except
for those classified
to other sectors)

Mining / Quarry /Gravel extraction

0.6%
6

0.1%
1

0.7%
7

Number of Employees
Up to 99

100 – 999

1,000 and above

47.0%

36.8%

16.2%

504

395

174

Type of Office
Head Office

Branch Office

56.5%
606

Sales Office

28.3%
304

Satellite Office

11.4%
122

Call Center

1.8%
19

Other

0.7%
7

1.4%
15

Location of Office
Tokyo 23 Wards

Osaka City

54.1%
581

Nagoya City

15.9%
171

Fukuoka City

10.6%
114

Size of Office under Lease Contract

Other

7.3%
78

12.0%
129

(1 tsubo = 3.3 sqm)

Up to 30 tsubo

Up to 50 tsubo

Up to 100 tsubo

Up to 200 tsubo

Over 200 tsubo

17.6%
189

16.1%
173

23.2%
249

17.1%
183

21.8%
234

Not answered
4.2%
45

Graphs contained in this report:• The sum of the rates may not be 100% in some cases because the rates are rounded to the second
decimal place.
• In Figure 4, only the top items responded by many are listed.

For questions on this report, please contact us.
Xymax Real Estate Institute
PHONE: +81 3 3596 1477 FAX: +81 3 3596 1478 info-rei@xymax.co.jp

Metropolitan Areas Office Demand Survey 2017 — Demand Trends
All the contents are as of the date of this report. Xymax Corporation does not guarantee the accuracy or completeness of the information herein.
Copying, quoting, forwarding, distributing, reprinting or any other use of this report is not allowed without prior permission from Xymax Real
Estate Institute Corporation.
Copyright © 2017 Xymax Corporation. All rights reserved.

19