Xymax Real Estate Institute

Office Market Report
Tokyo | Q4 2020
February 3, 2021

Summary

In Q4 (October–December) 2020, the office market of the 23 wards of Tokyo (“Tokyo 23 Wards”) continued
to see weak demand for office space as vacancy rates rose and rent levels dropped.



The vacancy rate was 1.87%, up 0.53 percentage points from the previous quarter. The increase anddecrease in vacant space showed that vacant space increased by 136,000 tsubo (1 tsubo = approx. 3.3sqm) and decreased by 77,000 tsubo. The increase in vacant space outweighed the decrease for the third
consecutive quarter. The vacancy turnover ratio, which is the rate of decrease of vacant office stock,
dropped 3.4 percentage points quarter on quarter to 26.8%.

The new contract rent index, the level of new lease rent, was 121, down 11 points from the previous
quarter. The contract rent diffusion index, which is the percentage of buildings with a rise in new rent
minus that of buildings with a drop in new rent, declined by 35 points from the previous quarter to -22, thefirst negative figure in 24 quarters.



The paying rent index, which includes both new and existing rents, was unchanged at 105.

The average free rent months of lease with free rent was unchanged from the previous quarter at 0.9
months. The ratio of free rent offered was 38.2%, up 4.4 percentage points quarter on quarter.

Office Market Report | Tokyo | Q4 2020
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 © 2021 Xymax Corporation. All rights reserved.

1

Xymax Real Estate Institute

Vacancy

Figure 1: Vacancy Rate (by Area)

Figure 1 shows the vacancy rates of Tokyo 23

Tokyo 23 Wards
Tokyo 5 Central Wards
Tokyo 18 Peripheral Wards

10%

Wards, the 5 Central Wards (Chiyoda, Chuo, Minato,

8%

Shinjuku, and Shibuya Wards), and the 18 Peripheral

6%

Wards since 2011. The rate in Q4 2020 rose by 0.53

4%

points from Q3 to 1.87% in the 23 Wards, by 0.57

2%

points to 1.74% in the 5 Central Wards, and by 0.36

0%points to 2.26% in the 18 Peripheral Wards. The
vacancy rate rose in all three areas for the third
Q4 2019

Q1 2020

Q2 2020

Q3 2020

Q4 2020

Tokyo 23 Wards

0.78%

0.71%

1.01%

1.34%

1.87%

Tokyo 5 Central Wards

0.63%

0.54%

0.89%

1.17%

1.74%

Tokyo 18 Peripheral Wards

1.28%

1.27%

1.37%

1.90%

2.26%

consecutive quarter.
Factors for the rise in vacancy rates include anincrease in companies that reduced their officespace due to the spread of telework in every

Figure 2: Vacancy Rate (by Building Size)business sector as a means to prevent the spread of
All Buildings

Large Buildings

Small & Medium Buildings

12%

COVID-19.

10%
8%

Figure 2 shows the vacancy rate of all sizes of6%
4%

buildings,

large

buildings(gross

floor

area

2%

(GFA): 5,000 tsubo or more), and small & medium

0%buildings (GFA: less than 5,000 tsubo) in Tokyo 23
Wards since 2011. In Q4 2020, the vacancy rate rose
Q4 2019

Q1 2020

Q2 2020

Q3 2020

Q4 2020All Buildings

0.78%

0.71%

1.01%

1.34%

1.87%

Large Buildings

0.74%
0.83%

0.58%
0.85%

0.82%
1.21%

0.93%
1.81%

1.39%
2.40%

Small & Medium Buildings

by 0.46 points to 1.39% among large buildings andby 0.59 points to 2.40% among small & medium
buildings.

Figure 3: Increase and Decrease in Vacant Space(23 Wards, All Building Sizes)(tsubo)Increase

Decrease

space. In Q4 2020, the increase in vacant space was

Vacancy Rate (right scale)

4000009%3500008%3000007%6%2500005%2000004%1500003%100000Figure 3 is the increase and decrease in vacant

2%

50000

1%

0

0%

136,000 tsubo, while the decrease was 77,000 tsubo.
The difference between the increased vacant spaceand decreased space has widened, with the increase
exceeding the decrease for the third consecutive
quarter. The gap widened due to an increase inrelocations for downsizing and partial cancellationsof lease contracts, despite there being cases where

Q4 2019

Q1 2020

Q2 2020

Q3 2020

Q4 2020

Increase

54,000150,000

117,000

102,000

136,000

Decrease

56,000162,000

86,00065,00077,000Vacancy (right scale)

0.78%

0.71%

1.01%

1.34%

1.87%

vacant space due to cancellations is filled fromwithin the building.

Office Market Report | Tokyo | Q4 2020
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 © 2021 Xymax Corporation. All rights reserved.

2

Xymax Real Estate Institute

Figure 4 shows the vacancy turnover ratio, theFigure 4: Vacancy Turnover Ratio
Vacancy Turnover Ratio

ratio of vacant spaces leased to tenants during the

4-quarter moving averagequarter to the total vacant office stock (vacant office

70%

60%

stock at start of quarter + vacant space added

50%
40%

30%

Q4 2020
26.8%

20%
10%
0%

during the quarter). The ratio in Q4 2020 droppedby 3.4 points from Q3 and 13.2 points from Q4 2019
to 26.8%, indicating a weakening of turnover. The
vacancy turnover rate fell below 30% for the first

Vacancy TurnoverQ4 2019

Q1 2020

Q2 2020

Q3 2020

Q4 2020

41.4%

70.4%

46.4%

32.4%

26.8%

New Contract Rent

Figure 5: New Contract Rent Index
180(Q1 2010=100)

160

time since Q3 2015 (29.4%).

Figure 5 is the new contract rent index, which is

Q2 2008
161

Q4 2020121

140

the rent level for new lease contracts. The index for
Q4 2020 was 121, down 11 points from Q3 anddown 7 points from Q4 2019. New contract rent,

120

which has continued to rise since Q2 2012, is100
Q2 201276

80

showing signs of peaking out and may be starting to
decline. There seems to be cases where lessors lower

60

their asking rent in response to an increase in
New Contract Rent Index

Q4 2019

Q1 2020

Q2 2020

Q3 2020

Q4 2020

128

137

128

132

121

companies reducing their office size amid the spreadof telework on the back of an uncertain economic
outlook.

Figure 6: New Contract Rent Index (by Size)200(Q1 2010=100)

Figure 6 is the new contract rent index by size ofbuilding. The index for large buildings with a GFA of

180
160

5,000 tsubo or more was unchanged from Q3 at 120,140

while that for small & medium buildings with a GFA

120
100

of less than 5,000 tsubo dropped by 12 points to80

122. The rising trend of the index appears to be60

peaking out regardless of the size of building.
Small & Medium (GFA less than 5,000 tsubo)

Large (GFA 5,000 tsubo or more)

Q4 2019

Q1 2020

Q2 2020

Q3 2020

Q4 2020

Large Buildings

127

132

124

120

120

Small & Medium Buildings

129

139

129

134

122

Office Market Report | Tokyo | Q4 2020
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 © 2021 Xymax Corporation. All rights reserved.

3

Xymax Real Estate Institute

Figure 7 is the contract rent diffusion index (DI)Figure 7: Contract Rent DI(the percentage of buildings with a rent rise minus

Rent increased (percentage of buildings) (left scale)
Rent decreased (percentage of buildings) (left scale)that of buildings with a rent decline), which indicatesContract Rent DI (right scale)Contract Rent DI (four-quarter moving average) (right scale)

100%
80%
60%
40%
20%
0%
-20%
-40%
-60%
-80%
-100%

100
80
60
40
20
0
-20
-40
-60
-80
-100

Q4 2020-22

Q3 200751

Q2 2009-75

the direction of changes in new contract rent. The DI
in Q4 2020 was -22, the first negative figure in 24
quarters. A negative DI means there were morebuildings with lower new rent than those with higher
new rent compared to six months ago. The DI fell 35
points from Q3. In Q4, the percentage of buildings

Contract Rent DI

Q4 2019

Q1 2020

Q2 2020

Q3 2020

Q4 2020

38

43

18

13

-22

with a rent decline more than doubled from Q3.
In Figure 11, we overlay the contract rent DI on the
new contract rent index (Figure 5) and examine them

Figure 8: Paying Rent Index

later in the TOPIC 1 section.

120 (Q1 2010=100)
Q1 2009
110
105

Q4 2020
105

Paying Rent

100

Figure 8 shows the paying rent index, which

90

includes both new lease rents and existing lease rents.

80

The index in Q4 2020 was 105, unchanged from Q3Q3 201377

70

but up 5 points from Q4 2019. The upward trend since60

Q3 2013 has continued. As some companies have

Paying Rent Index

Q4 2019

Q1 2020

Q2 2020

Q3 2020

Q4 2020

100

101

103

105

105

shown robust earnings during the pandemic, there
does not seem to be a major impact on paying rent
at present. However, future developments must be
monitored carefully, since paying rent tend to change

Figure 9: Free Rent
Free Rent Granted(left scale)
Average Free Rent
(right scale)100%

more slowly than new contract rent.
1 day or more (%)

2 months or more (%)

Free Rent

6 months or more (%)
New lease contracts with free rent (month)
All new lease contracts (month)

7
6
5
4
3
2
1
0

80%
60%
40%
20%
0%

Figure 9 shows the percentage of new lease
contracts with free rent to all new lease contracts(ratio of free rent offered) and the average freerent period (average free rent months). In Q4 2020,
the ratio of offering free rent of one day or morewas 38.2%, up 4.4 percentage points, and the ratio

Ratio ofFree Rent
GrantedAverage
Free Rent
Months

Q4 2019

Q1 2020

Q2 2020

Q3 2020

Q4 2020

1 day +

40.8%

36.6%

34.3%

33.8%

38.2%

2 mon. +

28.3%

26.8%

22.3%

20.9%

19.5%

6 mon. +

8.7%

7.3%

3.9%

2.2%

2.4%

All

1.3

1.2

0.9

0.9

0.9

w/ FR

3.2

3.3

2.8

2.6

2.4

of offering free rent of six months or more was 2.4%,
up 0.2 points. The average free rent months was 2.4
among lease contracts with free rent, 0.2months lessthan in Q3, and 0.9 months among all new contracts,
unchanged from Q3.

Office Market Report | Tokyo | Q4 2020
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 © 2021 Xymax Corporation. All rights reserved.

4

Xymax Real Estate InstituteMarket Cycle

Figure 10: Market Cycle

Figure 10 plots the vacancy rate on the horizontal

180
Q2 2008160

scale and the new contract rent index on the verticalscale on a quarterly basis. It shows the cyclicality of140
Q1 2001120

the market, with the chart trending to the lower

Q4 2020

Q2 2003right in 2001 (vacancy up, rent down), remaining

100

sluggish between 2003 and 2004, then trending to80

Q2 2012the upper left in 2005 (vacancy down, rent up) and9%

to the lower right again in 2008.

60
0%

1%

2%

3%

4%

5%

6%

7%

8%

10%

Q4 2019

Q1 2020

Q2 2020

Q3 2020

Q4 2020

Vacancy Rate

0.78%

0.71%

1.01%

1.34%

1.87%

New Contract Rent Index

128

137

128

132

121

Note: The vacancy rate before March 2011 is based on data by a major leasing agent.

The office lease market had been in a recovery
phase since 2013, however, the trend seems to haveswitched in Q1 2020, and the chart trended to thelower right in Q4 2020 as vacancy rates rose and the
new contract rent index fell.

Figure 11 overlays the new contract rent index

TOPIC 1

(Figure 5) on the contract rent DI (Figure 7). This has
indicated the following trends thus far:Figure 11: New Contract Rent Index and① The new contract rent index shifts its trend

Contract Rent DI
New Contract Rent Index(left scale)

200
180
160
140
120
100
80
60
40
20
0

when the contract rent DI crosses the 0 line. In

Contract Rent DI(right scale)

DI minus period
100②DI plus wide
Acceleration of rent increase

80

60
40

①Conversion

20①Conversion①Conversion①Conversion

0
-20
-40
-60

②DI minus wide
Rapid rent decline

-80
-100

other words, when the DI value moves frompositive to negative, the rent peaks out andturns downward. When the DI moves fromnegative to positive, the rent bottoms out andturns upward.
② When the absolute value of contract rent DI
becomes large, the rise and fall of rent per

Q4 2019

Q1 2020

Q2 2020

Q3 2020

Q4 2020

New Contract Rent Index

128

137

128

132

121

Contract Rent DI

38

43

18

13

-22

tsubo accelerate.
The contract rent DI turned negative to -22 in Q42020 for the first time in 24 quarters (six years). We
will keep an eye on the contract rent DI figures to
see whether the negative trend will continue.

Office Market Report | Tokyo | Q4 2020
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 © 2021 Xymax Corporation. All rights reserved.

5

Xymax Real Estate Institute

TOPIC 2
Figure 12: Availability Rate and Vacancy Rate
Vacancy Rate

Vacancy Rate on an Availability Basis(Availability Rate)
Here we examine the availability rate, which we

Availability Rate

12%

also examined in the TOPIC of Q3. This indicator is10%

derived by dividing the vacant space from which the8%tenant has already vacated and is available for6%
4%

immediate occupancy (currently vacant) plus the2%space for which notice of cancellation has been0%

given and is available (before the previous tenant
has left) by the total rentable space.
Q4 2019

Q1 2020

Q2 2020

Q3 2020

Q4 2020

Vacancy Rate

0.78%

0.71%

1.01%

1.34%

1.87%

Availability Rate

1.62%

1.71%

2.30%

3.42%

4.42%

Figure 12 shows the availability rate and vacancy
rate of Tokyo 23 Wards since 2011. The availability
rate was 4.42%, up 1.00 percentage points from Q3.

Figure 13: Availability Rate (by Area)

The increase is larger than the 0.53-point rise of theTokyo 23 Wards

14%

Tokyo 5 Central Wards

12%

Tokyo 18 Peripheral Wards

10%vacancy rate. This suggests that finding the next
tenant during the period between the notice ofcancellation of the lease and the vacating of the8%previous tenant is becoming difficult.

6%

4%
2%

Figure 13 shows the availability rate of Tokyo 23

0%Wards, the 5 Central Wards, and the 18 Peripheral
Q4 2019

Q1 2020

Q2 2020

Q3 2020

Q4 2020

Tokyo 23 Wards

1.62%

1.71%

2.30%

3.42%

4.42%

Tokyo 5 Central Wards

1.36%

1.44%

2.13%

3.35%

4.43%

Tokyo 18 Peripheral Wards

2.44%

2.57%

2.86%

3.65%

4.38%

Wards. The rate rose by 1.08 points from Q3 to
4.43% in the 5 Wards and by 0.73 points to 4.38% in
the 18 Wards. When comparing the 5 Wards and the18 Wards, the rate had been higher in the 18 Wards
until Q3 but in Q4 2020 it was higher in the 5 Wards
by 0.05 points. While the vacancy rate of the 5
Wards remained lower than that of the 18 Wards in
Q4 2020 as shown in Figure 1 (vacancy rate (byarea)), the vacancy rate might also become higher inthe 5 Wards unless available space is promptly filledin the 5 Wards.

Office Market Report | Tokyo | Q4 2020
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 © 2021 Xymax Corporation. All rights reserved.

6

Xymax Real Estate Institute

Figure 14: Availability Rate (by Building Size)

Figure 14 is the availability rate of all sizes ofbuildings, large buildings (GFA: 5,000 tsubo ormore), and small & medium buildings (GFA: lessthan 5,000 tsubo) in Tokyo 23 Wards. The availability
rate of large buildings tended to be lower than thatof small & medium buildings until around 2017,
after which the difference in availability rates
between different building sizes became small. This
trend has continued even since the rate turned
upward in Q1 2020, with the availability rate risingregardless of the size or area of the building. We willcontinue to monitor the rate and other indicators
closely to see whether this trend will continue.

Office Market Report | Tokyo | Q4 2020
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 © 2021 Xymax Corporation. All rights reserved.

7

Xymax Real Estate Institute

Review of the calculation method of vacancy turnover rate
We have reviewed our calculation method of the vacancy turnover rate and recalculated past andpresent data. Please note that the new method has been reflected from this report (Q4 2020) andthat figures in the past reports issued already will not be updated.
The past data that were recalculated are posted on our website. Those of you who are referring to thechronological trend of the vacancy turnover rate (Figure 4) are requested to replace the data.

Reference
Figure 15: Major Building Completions (Q4 2020)
FloorsName

Above ground/

Total floor
Ward

Address

Completion

Below groundarea(tsubo)SMBC TOYOSU BILUDING

24/1

Koto

2-2-1 Toyosu

Oct 2020

21,958SHIODOME WING

14/1

Minato1-2-15 Higashisinbashi

Nov 2020

2,981

Prime Terrace KAMIYACHO

10/1

Minato4-1-13 Toranomon

Nov 2020

2,805

Source: Compiled by Xymax Real Estate Institute based on information released by companies

Figure 16: Major Office Relocations (Q4 2020)
Company

From

Hitachi Social

Yokohama Mitsui

Information

Building

To
Omori Bellport D

Yokohama City

H.S. Insurance

Luogo Shiodome

CROSS DOCK HARUMI

Co., Ltd.

Minato Ward

Chuo Ward

DOWA BUILDING

Ginza Shochiku Square

Chuo Ward

Chuo Ward

RELATIONS CO.,LTD.

Roppongi Hills Mori
GREE, Inc.

Tower
Minato Ward

Jan 2021

Shinagawa Ward

Services, Ltd.

KYODO PUBLIC

TimingRoppongi Hills Gate Tower

Feb 2021

June 2021

Aug 2022

PurposeGreater
efficiency
Greater
efficiency
Greater
efficiency

Other

Size
(tsubo)
1,440

305

473

2,940

Minato Ward

Source: Compiled by Xymax Real Estate Institute based on information released by companies.
The sizes of offices are estimates.

Office Market Report | Tokyo | Q4 2020
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 © 2021 Xymax Corporation. All rights reserved.

8

Xymax Real Estate Institute

Survey Overview
Increase and Decreasein Vacant Space

Vacancy Rate

Vacancy Turnover Ratio

New Contract Rent Index

Description

Vacant space and available space versus total A quarterly increase and a quarterly decrease The ratio of the vacant space leased during
Office rent index based on new contract rents.
office stock in the market.
in volume of vacant space in the market.
the quarter to all the vacant office stock in the This index uses a statistical method to remove
market.
property-specific influences such as size andage of buildings.

Main Point

Supply and demand balance in the market

Supply and demand balance in the market

GFA 300 tsubo or more

GFA 300 tsubo or more

Data Used in
Recent Quarter

How toCalculate

GFA 300 tsubo or more

GFA 300 tsubo or more

Every Quarter

ReleaseData Source

Level of contract rents

Tokyo 23 Wards

MarketBuilding Size

Supply and demand balance in the market

Office Building

SectorData of available vacant spaces andData of available vacant spaces andData of available vacant spaces andData of new contract rents including CAM
buildings. Independently collected by Xymax. buildings. Independently collected by Xymax. buildings. Independently collected by Xymax. charge. Independently collected by Xymax.
8,610 buildings

7,989contracts• Vacancy rate
• Increase in volume of vacant space= vacant space ÷ rentable spacea. Space in existing buildings formerly• Vacant Spaceoccupied by tenants
Total available vacant space in completedb. Total rentable area of new completions
buildings as of the time of the research.
• Rentable Space• Decrease in volume of vacant space
Rentable space of completed buildings as of a. Space in existing buildings leased under athe time of the research.
new agreement
・Availability rateb. Space in new completions but lease is＝available space ÷ rentable space
signed prior to the completion
・Available spacec. Space that had been vacant but the owner
Total available space, which consist of vacant decided not to leasespace and space for which notice ofcancellation has been given.
Where rentable space is not available, theWhere rentable space is not available, therentable space is estimated from the grossrentable space is estimated from the grossfloor area of the building using the formula
floor area of the building using the formuladeveloped in the joint study with thedeveloped in the joint study with thelaboratory of Professor Naoki Kato at Kyoto
laboratory of Professor Naoki Kato at Kyoto University Graduate School of Engineering.
University Graduate School of Engineering.

Contract Rent DI

7,989 contracts

460 contracts• Vacancy Turnover Ratio= Volume of vacant space leased during thequarter ÷ (Initial vacancy + Vacancy added
during the quarter)
Then, compute the four-quarter moving
average amount with the ratio derived fromthis formula.

1) Develop a rolling hedonic model(overlapping period: five quarters) based on
the collected new contract data withproperty-specific factors as variables(location, building size, building age,facilities, date of signing of lease, etc.).

2) Estimate the quarterly contract rent by• Volume of vacant space leased during theassigning the values of a typical building toquarter: Same as the "decrease in volume of the model developed in the preceding step.
vacant space).
• Initial vacancy: Total volume of completed 3) The New Contract Rent Index is the rent
buildings that are available for lease as of the estimated in the preceding step based on Q1start of the quarter.
2010 as the base point (=100).
• Vacancy added during the quarter: Same as
the "increase in volume of vacant space"
This model shows changes in new contract
rents after removing property-specificvariables.

Paying Rent Index

Free Rent Granted (%) &Average Free Rent (Month)

Description

Index of changes in new contract rents. Calculated bycounting and comparing the buildings where rent has
increased and those where rent has decreased.

Index of changes in paying rents (new and existing contract Distribution of free rent and average length of free rent
rents).
period. Free rent is the time lag between the start of thecontract and the start of the rent payment.

Main Point

Direction of contract rent trends

Level of rents paid by tenantsTokyo 23 Wards

MarketBuilding SizeAll

Data Used in
Recent Quarter

How toCalculate

GFA 300 tsubo or moreAll

Every Quarter

ReleaseData Source

Market trends that are not reflected in contract rents

Office Building

SectorData of new contract rents including CAM charge.
Independently collected by Xymax.
384 contracts

Data of new and existing contracts signed for buildings
under management by Xymax.
4,000 contracts

Data of new contracts signed for buildings undermanagement by Xymax.
72 contracts

1) Compare the data of new contract rent per tsubo with
1) Calculate the rent per tsubo of each tenant from the data • Free Rent Periodthat in the 6-month prior period in the same building.
of new and existing lease contracts and memorandums.
The period between the start of the contract and the start
Each contract was counted separately into three categories: 2) Develop a rolling hedonic model (overlapping period:of the rent, shown in number of days.
buildings withfive quarters) based on the rents calculated in the• Ratio of Free Rent Granted"rent increase”,
preceding step (the "paying rent") with property-specific
The ratio of contracts with free rent in all the new"no change” orfactors as variables (location, building size, building age,contracts (excl. contracts for expansion within the building“rent decrease”
facilities, date of signing of lease, etc.).
and recontracts)
3) Estimate a quarterly contract rent by assigning the values • Average Free Rent (Month) of All the Contracts2) Calculate the percentage of buildings with “rentof a typical building to the model developed in the
The simple average of the free rent period including leasedecrease” and buildings with “rent increase”.
preceding step.
contracts with no free rent.
4) The Paying Rent Index is the rent estimated in the• Average Free Rent (Month) of Contracts with Free Rent
3) Subtract the percentage of buildings with “rent decrease” preceding step based on Q1 2010 as the base point (=100). The simple average of the free rent period of leasefrom the percentage of buildings with “rent increase”. This
contracts with free rent.
outcome is the Contract Rent Diffusion Index (DI).
With this method, influences from replacement of sample
data and deterioration of buildings over age are removed In some cases, the rent agreed in a lease contract includes
from the result.
CAM charge, and then, for a certain period of time, the rent
is reduced to the CAM charge equivalent or closer level, butsuch contracts are excluded from this research.

Office Market Report | Tokyo | Q4 2020
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 © 2021 Xymax Corporation. All rights reserved.

9

Xymax Real Estate Institute

Appendix: Xymax REI Research Updates (Nov. 2020 – Jan. 2021)
Greater Tokyo Office Worker Survey

November 24, 2020

・ This report is a summary of the results of a questionnaire survey of office workers in Greater Tokyo on the latest
trend of the actual work styles and values of workers in Greater Tokyo.

Building Owner Survey 2020 (Main Report)
・

November 26, 2020

This report is a summary of the results of a questionnaire survey of owners of small & medium-sized buildings
nationwide who lease out their buildings on the management state of the building lease business, its outlook, andresponses to changes in the environment surrounding the buildings.

Metropolitan Areas Office Demand Survey Autumn 2020
・

December 2, 2020

This report releases the results of a questionnaire survey of companies on their office use and the work styles of
their employees.

Fact-Finding Study on Store Strategies during the COVID-19 Pandemic・

December 18, 2020

This report summarizes the details of commercial operators’ store strategies as well as their changes and future
direction, based on a questionnaire survey of operators.

Real Trends of Real Estate 2021
・

December 25, 2020

This report focuses on themes that are deemed important in the society that surrounds us and examines the situationof the themes as well as their impact on real estate.

Supply of New Office Space 2021
・

January 15, 2021

This report is a summary of the results of an annual aggregation of rentable office space, targeting buildings with a
GFA of 3,000 tsubo or more used mainly as offices and are to be completed in Tokyo 23 Wards and Osaka City.

Office Stock Pyramid 2021
・

January 15, 2021

In this report we aggregate rentable office space and number of buildings by size, targeting buildings with a GFA of
300 tsubo or more used mainly for offices in Tokyo 23 Wards and Osaka City.

Greater Tokyo Company Survey on Work Styles and the Workplace | December 2020

January 27, 2021

・ This report summarizes the results of a questionnaire survey of companies in Greater Tokyo on the current state,issues and strategies of work styles under the corona crisis.

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

Office Market Report | Tokyo | Q4 2020
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 © 2021 Xymax Corporation. All rights reserved.

10