Xymax Real Estate institute

RESEARCH REPORT

Flexible Office Market Survey 2023
Increased supply of flexible offices in Tokyo’s 23 Wards

February 7, 2023

Through the work style reform initiatives that have been implemented thus far, it has become increasingly
important for companies to provide workers with workplace options. The spread of COVID-19 that began totake hold in early 2020 has also forced many companies to reconsider their employees’ work styles andworkplaces. Furthermore, the spread of telework has attracted attention to workplaces that can be used flexibly
in terms of time and place according to the needs of the workers (i.e., flexible offices), leading to a rapid growthof its market.
To quantify the growth trend of the flexible office market, Xymax Real Estate Institute (“Xymax REI”) has, every
year since 2020, been gathering and analyzing quantitative data of flexible offices located in the 23 wards ofTokyo (hereinafter, “Tokyo 23 Wards”), such as the number of offices, floor area, and number of operators. In this
4th report, we release the aggregation results of data gathered by December 2022.
Flexible offices offer a diverse and segmentalized range of services and are called by different names such as
rental offices, shared offices, serviced offices, satellite offices, and co-working offices, depending on the operator.
In this report, we use the term “flexible office,” which is the target of the survey, as a generic term for workplaces
provided by operators mainly to companies and self-employed individuals under various forms of contract,
including service contracts and fixed term building lease contracts, instead of a typical office lease contract.
(1 tsubo = approx. 3.3 sqm)

Main Findings
1. Expansion of the Flexible Office Market

There are 1,260 flexible offices spanning approx. 239,000 tsubo in the Tokyo 23 Wards. The number
has been increasing year by year.

The total floor area of flexible offices in the Tokyo 23 Wards is approximately 1.8% of the office stock(13.11 million tsubo).



There are 116 operators of flexible offices.

2. Area Characteristics
Of the flexible offices located in the Tokyo 23 Wards, 66.3% of the total number of offices and 84.1%
of total floor area are concentrated in the 5 central wards.

In terms of the trend from past surveys, the share of the 18 peripheral wards has been increasing inboth the number of offices and floor area.

3. Observations
Backgrounds to the market expansion include the spread of flexible offices into not only offices’
exclusive areas but also a variety of other places, such as offices’ common areas, railway stations,accommodation facilities, retail facilities and financial institutions, and the greater diversity in officetypes.

Flexible Office Market Survey 2023
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 © 2023 Xymax Real Estate Institute Corporation. All rights reserved.

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RESEARCH REPORT｜Xymax Real Estate InstituteExpansion of the Flexible Office Market
We will start by examining the trend of the expansion of the flexible office market. Figures 1 to 3 indicate thestock (number of offices and floor area) and the number of operators (including estimates) of flexible offices in
the Tokyo 23 Wards that were confirmed to have been in operation in each year.
The total number of flexible offices in the Tokyo 23 Wards that were confirmed to have been in operation in
the survey conducted in October to December 2022 was 1,260. The number has been growing each year (Figure1).
Figure 1: Number of Flexible Offices (Tokyo 23 Wards)

Flexible Office Market Survey 2023
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 © 2023 Xymax Real Estate Institute Corporation. All rights reserved.

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RESEARCH REPORT｜Xymax Real Estate Institute
The total floor area of flexible offices in the Tokyo 23 Wards is also increasing each year and was approximately
239,000 tsubo. This is around 1.8% of the office stock of the Tokyo 23 Wards (13.11 million tsubo) *1 (Figure 2).
*1 See Office Stock Pyramid 2023, released on January 18, 2023
https://www.xymax.co.jp/english/research/images/pdf/20230118_2.pdf

Figure 2: Floor Area of Flexible Offices (Tokyo 23 Wards)

The total number of operators of flexible offices in the Tokyo 23 Wards was 116 (Figure 3).
Figure 3: Number of Operators of Flexible Offices (Tokyo 23 Wards)

Flexible Office Market Survey 2023
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 © 2023 Xymax Real Estate Institute Corporation. All rights reserved.

3RESEARCH REPORT｜Xymax Real Estate InstituteArea Characteristics
To examine the characteristics of the areas in which flexible offices are located, we compared the distributionof flexible offices in the 5 central wards (Chiyoda, Chuo, Minato, Shibuya, and Shinjuku wards) and the 18
peripheral wards.
Figure 4 shows the number of offices and floor area in the 5 central wards and the 18 peripheral wards as apercentage to the 1,260 flexible offices in the Tokyo 23 Wards. In terms of the number of offices, the 5 central
wards accounted for 66.3% while the 18 peripheral wards accounted for 33.7%. In terms of floor area, the former
accounted for 84.1% and the latter 15.9%. The average floor area per office in the 5 central wards and the 18
peripheral wards was 240.0 tsubo and 89.8 tsubo, respectively.
Figure 4: Distribution of Flexible Offices (5 Central Wards and 18 Peripheral Wards)

If we look at the trend of the number of offices and floor area in the 5 central wards and the 18 peripheral
wards, the percentage of offices in the 18 peripheral wards has risen from 26.1% to 33.7% over the past threeyears, indicating that flexible offices are spreading to the suburbs (Figure 5).
Figure 5: Number of Flexible Offices (5 Central Wards and 18 Peripheral Wards)(Figures in brackets are the percentage of 5 central wards and 18 peripheral wards to the year’s stock)

Flexible Office Market Survey 2023
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 © 2023 Xymax Real Estate Institute Corporation. All rights reserved.

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RESEARCH REPORT｜Xymax Real Estate InstituteMeanwhile, although the 18 peripheral wards have also seen an increase in its percentage of floor area overthe past three years, from 9.9% to 15.9%, the 5 central wards still account for more than 80% (Figure 6).
Figure 6: Floor Area of Flexible Offices (5 Central Wards and 18 Peripheral Wards)(Figures in brackets are the percentage of 5 central wards and 18 peripheral wards to the year’s stock)

Flexible Office Market Survey 2023
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 © 2023 Xymax Real Estate Institute Corporation. All rights reserved.

5RESEARCH REPORT｜Xymax Real Estate InstituteObservations
This survey has revealed that the flexible office market of the Tokyo 23 Wards has continued to grow in boththe number of offices and floor area. The backgrounds to the market growth include the spread of flexible offices
into not only offices’ exclusive areas but also places such as accommodation facilities, retail facilities, andfinancial institutions. In particular, private booths for one person are being increasingly installed in railway
stations and the common areas of office buildings. The survey also indicates that the market expansion is basedon expansions and new openings of offices by existing operators and not on an increase in new entrants, as thepace of growth in the number of operators, which is continuing, is slower than that in the number of offices andfloor area. As for operators, there have been moves to increase the number of available offices and diversify
office types through partnerships between operators in an effort to offer more convenient services.
In terms of the number of offices and floor area in the 5 central wards and the 18 peripheral wards, thepercentage of the 18 peripheral wards has been increasing, which indicates that flexible offices are spreading tothe suburbs. As telework takes root due to the COVID-19 pandemic, it can be assumed that the supply of flexible
offices is being dispersed into areas where many workers reside. In terms of floor area, however, more than 80%
are still concentrated in the 5 central wards. The fact that there is a difference in floor area per office of morethan 2.5 times between the 5 central wards and the 18 peripheral wards suggests that the types of flexible offices
provided in the two areas are different.
Flexible offices are expected to continue to take root and grow as a workplace platform as they become morediverse in terms of asset type, service, facility, and geographic area. Xymax REI will continue to release usefulfindings by observing the quantitative changes in the flexible office market, as covered in this report, as well as
qualitative changes including services, facilities, geographic areas, and business operator trends.

Related surveys
Flexible Office Market Survey 2020, released on January 31, 2020
https://www.xymax.co.jp/english/research/images/pdf/20200131.pdf
Flexible Office Market Survey 2021, released on February 17, 2021 (in Japanese only)
https://soken.xymax.co.jp/2021/02/17/2102-flexible_office_survey_2021/Flexible Office Market Survey 2022, released on February 25, 2022
https://www.xymax.co.jp/english/research/images/pdf/20220225.pdf

Flexible Office Market Survey 2023
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 © 2023 Xymax Real Estate Institute Corporation. All rights reserved.

6RESEARCH REPORT｜Xymax Real Estate Institute
Survey Overview
PeriodOctober to December 2022

Workplace services provided by operators mainly to companies and self-employed individuals undervarious forms of contract, including service contracts and fixed term building lease contracts, insteadof a typical office lease contract.
* Offices that had closed or had not yet opened at the time of the survey were excluded from the stock.
* The data of offices prior to 2020 are based on the confirmed launch year (includes some estimates).
* Excludes telework arrangements by karaoke stores, hotels, eating and drinking establishments, etc.
* Includes private booths for one person.
* The sum figures may not match due to rounding.

Target* The figures contained in this report are aggregate figures as at the time of the survey. Data is added andupdated on a daily basis.
* The floor area of each office is the published floor area, if available. If it is not available, one of the following
was used as an estimate:∙ If the entire building is used: The rentable area estimated from the gross building area.
∙ If the number of floors is known: The product of the standard story area and the number of floors ofthe building.
∙ The average floor area of other offices of the same brand of which the floor area is published.

∙ The average floor area of offices excluding large offices (i.e., average office floor area of 1,000 tsuboor more) and small offices such as private booths for one person (i.e., average office floor area of lessthan 10 tsubo).

Coverage

23 wards of TokyoMethod

Online survey, inquiries and interviews with operators

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

Flexible Office Market Survey 2023
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 © 2023 Xymax Real Estate Institute Corporation. All rights reserved.

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