Xymax Real Estate Institute

RESEARCH REPORTTOKYO 23 WARDS | Supply of New Office Space 2017 &Office Stock Pyramid 2017
December 26, 2016

Xymax Real Estate Institute released a report on Supply of New Office Space 2017 and Office Stock Pyramid
2017 covering the Tokyo 23 Wards office area. The volume of new supply in the coming years indicates a direct
impact on the market balance in the future. The Office Stock Pyramid is an aggregation of all the rentable areasof office buildings in the market and it shows the breakdown of the office building stock (rentable area andnumber of buildings) by size of the building (small/medium/large) and by age, and the balance and proportionof office buildings in the market.
From this report, these two studies were combined into one report.
1 tsubo = approx. 3.3 sq m
SUMMARY OF RESULTSTOKYO 23 WARDS | Supply of New Office Space 2017
New supply in 2017 is 117,000 tsubo. This is small and equivalent to the volume in 2013 when it was
10-year low. However, a relatively large volume is expected for 2018-2020 with around 200,000
tsubo per annum.



Average new supply in 2017-2020 is 181,000 tsubo per annum based on rentable area. This isequivalent to the 10-year average of 180,000 tsubo per annum.



A large proportion of new supply in 2017-2020 is in the central three wards (Chiyoda, Chuo andMinato), accounting for 68% of the entire new supply.



New supply rate (new supply in 2017-2020 versus office stock at year-end 2016) is expected to beapprox. 6.0% (1.5% per annum on average).

TOKYO 23 WARDS | Office Stock Pyramid 2017


Office stock at year-end 2017 is 12.26 million tsubo based on the rentable area: 5.77 million tsubo(47%) in small and medium buildings and more than half or 6.49 million tsubo (53%) in large
buildings.

In the number basis, the office stock is 8,395 buildings. Of them, small and medium buildings
account for more than 90% (7,672 buildings).



Buildings' average age is 29.1 years for all the stock, 29.7 years for small and medium buildings and22.5 years for large buildings. Aging of stock is prominent in small and medium buildings.



By area, the central five wards have 9.30 million tsubo rentable area and 6,424 buildings, which areapprox. three-fourths of the stock in all the wards, and the periphery 18 wards have the remaining
2.96 million tsubo rentable area and 1,971 buildings.



By area, the average age of buildings is 29.6 years for central five wards and 27.3 for periphery 18
wards.

TOKYO 23 WARDS | Supply of New Office Space 2017 & Office Stock Pyramid 2017
All rights reserved. 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 Corporation.
Copyright © 2017 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 2017
The new supply in Tokyo 23 Wards in 2017 is 117,000 tsubo, which is drastically below the average annual
volume in 2007-2016 (hereinafter the "10-year average"). However, in 2018 and beyond, the annual supply is
expected to exceed the 10-year average to around 200,000 tsubo per annum. The new supply in 2017-2020*1

decreased from our previous study in 2016 for 2016-2019, from 186,000 tsubo to 181,000 tsubo per annum(Figure 1). If compared, the average new supply in 2017-2020 will be equivalent to the 10-year average.
If we look at large buildings (gross floor area: 10,000 tsubo and above), the average new supply in 2017-2020 is
165,000 tsubo per annum, exceeding the 10-year average of 138,000 tsubo per annum. The new supply of large
buildings will remain strong in particular from 2018 forward as the volume is expected to go beyond 180,000
tsubo per annum.
The new supply rate, which is the rate of new supply in 2017-2020 versus the office stock at year-end 2016, isapproximately 6.0% (1.5% per annum).
*1

Supply of New Office Space 2016 released on December 24, 2015
https://www.xymax.co.jp/english/research/images/pdf/20151224.pdf

Figure 1: Tokyo 23 Wards Supply of New Office Space (Net Rentable Area)(tsubo)400,000
350,000
300,000

2007-2016 Average

2017-2020 Average

180,000 tsubo
per annum

181,000 tsubo
per annum

275,000

267,000

250,000
200,000
150,000
100,000
50,0000

213,000
199,000
194,000

195,000
170,000
169,000
177,000
157,000
133,000
151,000
234,000
117,000
156,000
235,000
110,000
111,000 96,000 112,000
183,000 183,000
151,000
84,000125,000
75,00099,00032,00049,000 58,000 61,000 58,000 41,000 35,000

2007

2008

2009

2010

2011

2012

2013

Gross Floor Area: 3,000 tsubo - 10,000 tsubo

26,000 26,000 39,000 18,000 30,000 16,000

2014

2015

2016

2017

2018

2019

2020

Gross Floor Area: 10,000 tsubo or above

TOKYO 23 WARDS | Supply of New Office Space 2017 & Office Stock Pyramid 2017
All rights reserved. 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 Corporation.
Copyright © 2017 Xymax Real Estate Institute Corporation. All rights reserved.

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RESEARCH REPORT｜Xymax Real Estate Institute
By area, 68% of the new supply is in the central three wards (Chiyoda, Chuo and Minato). Here are thehighlights (Figure 2).


In Marunouchi-Otemachi-Yurakucho, the central Tokyo's prime office district, the new supply isapproximately 120,000 tsubo, the largest supply of all the office areas in Tokyo. Redevelopment projects
were launched one after another in this area. The new supply of large buildings is expected to continue.



In Shibaura-Kaigan, the supply of new office buildings from large-scale redevelopment projects is
expected in an area where used to be a non-office district.



In Toranomon, the new supply from large-scale redevelopments is expected to continue because
integrated redevelopments are going on in this area encompassing various sectors including theinfrastructure improvements (Kanjo Route No. 2, the new subway station and bus-rapid transit system)and the hotel and medical facilities developments.
Figure 2: New Supply by Area (2017-2020)
0

20,00040,00060,00080,000 100,000 120,000

Marunouchi-Otemachi-Yurakucho(tsubo)119,000

Shibaura-Kaigan
95,000【図表 2】エリア別オフィス供給量（2016-2019 年）
Toranomon
Shibuya

86,00043,000Toyosu39,000Osaki-Kitashinagawa-Nishishinagawa

35,000

Nihombashi-Yaesu-Kyobashi

35,000Jinnan-Udagawacho-Dogenzaka

2017

2018

2019

29,000TOKYO 23 WARDS | Supply of New Office Space 2017 & Office Stock Pyramid 2017
All rights reserved. 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 Corporation.
Copyright © 2017 Xymax Real Estate Institute Corporation. All rights reserved.

2020

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RESEARCH REPORT｜Xymax Real Estate InstituteTOKYO 23 WARDS | Office Stock Pyramid 2017The Office Stock Pyramid follows the method of a population pyramid representing the distribution of age
groups by gender. We divided the office building stock into small and medium buildings and large buildings
and then compared their rentable area and the number of buildings by age. The pyramid shows the balanceand proportion of the office stock.

1. Small & Medium Buildings versus Large Buildings
The office stock in Tokyo 23 Wards as of end of 2017 is 12.26 million tsubo based on rentable area. Of them,small and medium buildings (gross floor area: less than 5,000 tsubo) are 5.77 million tsubo, accounting for 47%of the entire stock, and large buildings (gross floor area: 5,000 tsubo and above) are 6.49 million tsubo,
accounting for 53%; the rentable areas of large buildings and small and medium buildings are approximately
the same (Figure 3).
The average age of the buildings is 29.1 years. Aging of the stock is prominent in small and medium buildings
in particular.
Figure 3: Tokyo 23 Wards Office Stock Pyramid 2017(Net Rentable Area)
Small & Medium vs LargeTOKYO 23 WARDS | Supply of New Office Space 2017 & Office Stock Pyramid 2017
All rights reserved. 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 Corporation.
Copyright © 2017 Xymax Real Estate Institute Corporation. All rights reserved.

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RESEARCH REPORT｜Xymax Real Estate InstituteIn the number basis, there are 8,395 buildings in the office stock in Tokyo 23 Wards: 7,672 buildings (91%) aresmall or medium buildings and 723 buildings (9%) are large buildings (Figure 4).
If we look at the small and medium buildings, the stock is dominated by buildings constructed during the
bubble era (1986-1997; 20-31 years old). Buildings constructed 20 years ago or before account for over 80%(6,586 buildings) of all the small and medium buildings. Compared with this, there was not much new supply
after the bubble era; 1,086 buildings were constructed in the recent 20 years. This is the same in the rentablearea basis; office buildings constructed 20 years ago or before dominate the stock. There are 4.68 million tsubo
constructed 20 years ago or before while 1.09 million tsubo were constructed in the recent 20 years.
The office stock of large buildings has only a small difference; 325 buildings were constructed in the recent 20
years while the buildings constructed 20 years ago or before slightly exceeded this to 398 buildings. This isagain the same in the rentable area basis; 3.24 million tsubo was constructed 20 years ago or before while 3.25
million tsubo was constructed in the recent 20 years; the numbers are approximately the same, indicating thatthe new supply continued even after the bubble era.
Figure 4: Tokyo 23 Wards Office Stock Pyramid 2017 (Number of Buildings)
Small & Medium vs Large

2. Analysis by Area (Central Five Wards and Periphery 18 Wards)
We made a separate pyramid for the central five wards and for the periphery 18 wards. As of end of 2017, theoffice stock in Tokyo's central five wards is 9.30 million tsubo based on the rentable area, accounting for 76% of
the overall office stock in Tokyo 23 Wards. Here is the breakdown: 4.36 million tsubo (47%) is small and medium
buildings and 4.95 million tsubo (53%) is large buildings (Figure 5).
The average age of the stock in the central five wards is 29.6 years. Aging of the stock is more rapid for small
and medium buildings than for large buildings: 30.1 years and 23.8 years, respectively.
TOKYO 23 WARDS | Supply of New Office Space 2017 & Office Stock Pyramid 2017
All rights reserved. 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 Corporation.
Copyright © 2017 Xymax Real Estate Institute Corporation. All rights reserved.

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RESEARCH REPORT｜Xymax Real Estate Institute
Figure 5: Tokyo Central Five Wards Office Stock Pyramid 2017 (Net Rentable Area)
Small & Medium vs Large

In the number basis, there are 6,424 buildings in Tokyo's central five wards. Of them, 5,889 buildings (92%) aresmall or medium buildings while 535 buildings (8%) are large buildings (Figure 6).
Figure 6: Tokyo Central Five Wards Office Stock Pyramid 2017 (Number of Buildings)
Small & Medium vs LargeTOKYO 23 WARDS | Supply of New Office Space 2017 & Office Stock Pyramid 2017
All rights reserved. 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 Corporation.
Copyright © 2017 Xymax Real Estate Institute Corporation. All rights reserved.

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RESEARCH REPORT｜Xymax Real Estate InstituteNow if we look at the stock as of end of 2017 in Tokyo's periphery 18 wards, the rentable area is 2.96 million
tsubo, accounting for 24% of overall Tokyo 23 Wards. Of them, 1.41 million tsubo (48%) is small or medium
buildings and 1.54 million tsubo (52%) is large buildings (Figure 7).
The average age of the stock in the periphery 18 wards is 27.3 years, meaning buildings are slightly newer thanthose in the central five wards. For small and medium buildings, the average age is 28.2 years, and for large
buildings, it is 18.7 years. This is because large buildings that are over 30 years of age rarely exist in the
periphery 18 wards.
Figure 7: Tokyo Periphery 18 Wards Office Stock Pyramid 2017 (Net Rentable Area)
Small & Medium vs LargeTOKYO 23 WARDS | Supply of New Office Space 2017 & Office Stock Pyramid 2017
All rights reserved. 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 Corporation.
Copyright © 2017 Xymax Real Estate Institute Corporation. All rights reserved.

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RESEARCH REPORT｜Xymax Real Estate InstituteIn the number basis, there are 1,971 buildings in the periphery 18 wards; 1,783 buildings (90%) are small andmedium buildings while 188 buildings (10%) are large buildings (Figure 8). Many of the small and medium
buildings were constructed during the bubble era.
Figure 8: Tokyo Periphery 18 Wards Office Stock Pyramid 2017 (Number of Buildings)
Small & Medium vs LargeTOKYO 23 WARDS | Supply of New Office Space 2017 & Office Stock Pyramid 2017
All rights reserved. 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 Corporation.
Copyright © 2017 Xymax Real Estate Institute Corporation. All rights reserved.

8

RESEARCH REPORT｜Xymax Real Estate Institute

OVERVIEW OF STUDY

Supply of New Office Space
Date

November 2016

Area

Tokyo 23 Wards

Subject
Building

3,000 tsubo or above gross floor area / Used mainly as office space (but excluding
owner-occupied buildings)

Subject Data

Office rentable area (tsubo)

MethodBased on publicly available information such as newspaper articles. Also some site
inspections and interviews with developers.

• The subject of this study is the floor area of new supply. This is not a complete survey.
• If the net rentable area is publicly available, that size is used in this study. If not, we estimated it based on the gross floor area withthe formula jointly developed with the laboratory of Dr. Naoki Katoh, Professor of Kyoto University Graduate School of Engineering.
• The new supply estimated in this study is the estimated amount as of the date of this study. Actual new supply changes as new
information becomes available.

Office Stock Pyramid
Date

November 2016

Area

Tokyo 23 Wards

Subject
Building

As of the end of 2017 / 300 tsubo or above gross floor area / Construction completed inor after 1946 (incl. buildings to be completed within 2017) / Used mainly as office

Subject Data

Number of office buildings and office rentable areas of large buildings and small andmedium buildings.
Large buildings (gross floor area: 5,000 tsubo or above)
Small and medium buildings (gross floor area: 300-5,000 tsubo)• The data were collected from publicly available information such as newspaper articles and for-rent information (in the past too).
We collected the data of buildings if their date of construction is available. Owner-occupied buildings were excluded.
• The data of new constructions replacing the old buildings and the data of demolished buildings have been collected and reflectedto the extent possible.
• The amounts in this study are the amounts as of the date of this study and are subject to change as new information becomes
available.
• The office stock in 2017 includes buildings which will be completed in 2017 if such completion schedule is available as of Nov. 2016.
• If the net rentable area is publicly available, that size is used in this study. If not, we estimated it based on the gross floor area withthe formula jointly developed with the laboratory of Dr. Naoki Katoh, Professor of Kyoto University Graduate School of Engineering.
• Buildings constructed under the "old seismic standards” refer to the buildings constructed before the enforcement of the newseismic standards in 1981. In this study, buildings completed in 1981 or before were deemed as constructed in line with the old
seismic standards.

TOKYO 23 WARDS | Supply of New Office Space 2017 & Office Stock Pyramid 2017
All rights reserved. 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 Corporation.
Copyright © 2017 Xymax Real Estate Institute Corporation. All rights reserved.

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