Xymax Real Estate Institute

RESEARCH REPORT

Metropolitan
Spring 2018

Areas

OfficeDemandSurveyCapturing the changing trend of office demand

July 3, 2018

Companies have been hiring more in recent years on the back of increased corporate earnings, which has
been a cause of a rise in office demand. In addition, more companies are introducing flexible workstyles that are
not bound to place and time, in an effort to address urgent issues of securing diversity in human resources andimproving productivity on the back of concerns of labor shortage due to the decline in the working-age
population. This trend is likely to have an impact on required size, location, and usage styles that companies
require in selecting offices.
Since autumn 2016, Xymax Real Estate Institute has conducted questionnaire surveys on companies’ use of
offices and workstyles on a regular basis (twice a year). It has continuously published the results of its analysis
on office demand. This report covers the results of the fourth survey.

Related surveys:
・Autumn 2016 (1st survey) Metropolitan Areas Office Demand Survey 2016 – Demand Trends, published January 12, 2017
・Autumn 2016 (1st survey) Metropolitan Areas Office Demand Survey 2016 – New Ways of Working and Office, published January
30, 2017
・Spring 2017 (2nd survey) Metropolitan Areas Office Demand Survey 2017 – Demand Trends, published August 2, 2017
・Autumn 2017 (3rd survey) Metropolitan Areas Office Demand Survey Autumn 2017, published December 7, 2017https://www.xymax.co.jp/english/news_research/?type=research

Summary of Survey Results(1 tsubo = 3.3 sqm)
1.

Change in office demand (April 2017–March 2018) (Pages 3–9)

40.0% of companies saw an increase in the number of office users over the past year,
exceeding companies that saw a decrease (13.3%). 9.1% of companies expanded their officespace, while 2.7% downsized, indicating that office demand was robust. (Figures 1, 2)
The result was similar for rent per tsubo (incl. CAM): Increased (16.6%)

Decreased (1.1%)

In terms of the location of office, office expansion and rent increases were prominent in the Tokyo
23 Wards. In terms of company size, office expansion was prominent at companies with 100–999
employees.

2.

38.3% of companies still think their current office is small.
Diversification of workplaces (Pages 10–13)

More companies are making efforts to offer alternative workplaces, such as

work-from-home programs (20.6%) and satellite and serviced offices. (Figure 14)Large companies (with 1,000 or more employees) tend to be more active in offering alternative
workplaces as a way to support telework.
However, compared to the Spring 2017 survey, the growth rate was high at companies with 100–999 employees.

Metropolitan Areas Office Demand Survey Spring 2018
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
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RESEARCH REPORT｜Xymax Real Estate Institute

In terms of location and industry, companies in the Tokyo 23 Wards and in the telecommunicationsindustry tend to be more active diversifying workplaces as a way to support telework.

3.

Outlook of office demand (Pages 14–19)

Companies that replied that the number of office users will increase (41.1%) exceeded

those that expected a decrease (5.2%). Similarly, companies that replied that they wanted to
expand their office space (23.5%) exceeded those that wanted to downsize (4.6%), indicatingthat office demand will remain robust. (Figures 18, 19)What companies placed the most importance on when carrying out office strategies was“productivity improvement” (65.8%). The results indicated that companies tended to focus more on
employee satisfaction than on cost.

More than 40% of companies chose “heavy cost burden” as the top concern or obstacle in carryingout office strategies. Matters related to internal coordination ranked higher than in the Spring 2017
survey.

Compared to companies that have not offered a place for telework, companies that have hadsmaller office space per person.

Metropolitan Areas Office Demand Survey Spring 2018
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
Copyright © 2019 Xymax Real Estate Institute Corporation. All rights reserved.

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RESEARCH REPORT｜Xymax Real Estate Institute

1. Change in Office Demand (April 2017–March 2018)
1-1.

Changes in the number of office users, size of office, and rent per tsubo (incl. CAM charges)More companies saw an increase in the number of office users (40.0%) than a decrease (13.3%).

More companies expanded their office space (9.1%) than those that downsized (2.7%).



Similarly, more companies replied that rent per tsubo (incl. CAM charges) increased (16.6%) thanthose that replied that it decreased (1.1%).

The changes in the number of office users, office size, and rent per tsubo (including CAM charges; the same
applies hereafter) over the past year (April 2017–March 2018) were as below.
Companies that saw an increase in the number of office users far exceeded companies that saw a decrease,by 26.7 points (Figure 1, bottom bar). Similarly, the percentage of companies that expanded their office spaceexceeded that of companies that downsized by 6.4 points (Figure 2, bottom bar). The percentage of companies
that saw an increase in rent per tsubo outstripped that of companies that saw a decrease (Figure 3, bottom bar).
We believe that such growth in companies’ demand has led to limited availability of offices in metropolitan
areas. In addition, the fact that the percentage of companies that saw an increase in office users was larger thanthe percentage of companies that expanded their office space indicates that a certain number of companies
increased their personnel without expanding office space. Such circumstances have probably led to theimpression of office size described later (Figure 11).
Figure 1: Change in the Number of Office Users
0%

20%

40%

60%

80%

100%

Autumn 2016 (n=1,124)

36.5%

49.8%

12.5% 1.2%

Spring 2017 (n=1,073)

37.6%

48.6%

12.9% 1.0%

Autumn 2017 (n=1,294)

37.5%

49.1%

12.3% 1.2%

Spring 2018 (n=1,250)

40.0%

45.7%

13.3% 1.0%

Increased

No change

Decreased

Don't know

Metropolitan Areas Office Demand Survey Spring 2018
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
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RESEARCH REPORT｜Xymax Real Estate Institute
Figure 2: Change in Office Size
0%

20%

40%

60%

80%

100%

Autumn 2016 (n=1,124)

9.2%

84.9%

3.2% 2.8%

Spring 2017 (n=1,073)

7.9%

85.3%

2.0% 4.8%

Autumn 2017 (n=1,294)

8.6%

86.1%

2.2% 3.2%

Spring 2018 (n=1,250)

9.1%

86.1%

2.7% 2.1%

Expanded

No change

Downsized

Don't know

Figure 3: Change in Rent per Tsubo
0%

20%

40%

60%

80%

100%

Autumn 2016 (n=1,124)

12.9%

67.5%

3.6%

12.0%

4.0%

Spring 2017 (n=1,073)

14.0%

65.4%

2.6%

13.1%

4.8%

Autumn 2017 (n=1,294)

15.9%

Spring 2018 (n=1,250)

16.6%

Increased

No change

70.1%

1.9%

72.0%

Decreased

Don't know

1.1%

12.1%

10.2%

No response(Figures 1–3: Single answer)

1-2.

Change in office size (details)

The top two forms of office size expansion were “relocation” (43.9%) and “expansion in same building”(28.9%). The top reason for expansion was “office space became too small due to increase inpersonnel” (72.1%).

The most common form of downsizing was “relocation” (64.7%), exceeding “downsizing in samebuilding” (29.4%). The most common reason for downsizing was “to reduce office costs” (56.3%).

In terms of the form of office space expansion, more companies expanded their office by relocating toanother building than by expanding in the same building. The result was likewise for office downsizing, withmore companies downsizing through relocation than downsizing in the same building (Figures 4 and 5). Given
the tight office market, some companies may have given up their initial plan of expanding in the same building
due to lack of availability and relocated or opened a sub-office, or decided to relocate since they were asked fora rise in rent upon renewal of their lease.
The top reasons for expansion included “office space became too small due to an increase in personnel”(72.1%) and “to respond to personnel increase due to future increase in hiring” (41.4%), indicating companies’
positive stance toward securing personnel. These were followed by “for greater comfort in the office

Metropolitan Areas Office Demand Survey Spring 2018
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
Copyright © 2019 Xymax Real Estate Institute Corporation. All rights reserved.

4

RESEARCH REPORT｜Xymax Real Estate Instituteenvironment” (33.3%), which suggests a rising interest in the impact of offices on workers (Figure 6).
On the other hand, the most popular reason for downsizing was “to reduce office costs” (56.3%) as in lastyear’s survey, while “due to a decrease in personnel” (18.8%) changed places with “for office space efficiency”(40.6%) (Figure 7). There seems to be a change in the background of companies downsizing their office.
Figure 4: Form of Office Expansion
0%

20%

Figure 5: Form of Office Downsizing

40%

0%

60%
43.5%
43.9%

Relocation

Cancellation of sub-office

5.9%
10.5%

New opening*2
Consolidation and relocation

7.1%
3.5%

Other

5.9%
2.6%

Spring 2017 (n=85)

Consolidation and relocation

Other

Figure 6: Reason for Expansion
20%

60%

42.9%
41.4%

For greater comfort

33.3%
33.3%

Not enough meeting rooms

25.0%
31.5%

Office space efficiency*3

To reinforce sales

Spring 2017 (n=84)

4.8%
0.0%

0%

80%
65.5%
72.1%

Increase in personnel

To motivate employees

23.8%
2.9%

Spring 2018 (n=34)

Figure 7: Reason for Downsizing

40%

For future increase in hiring

64.7%

0.0%
5.9%

Spring 2017 (n=21)

Spring 2018 (n=114)

80%

33.3%
29.4%

Downsizing in same building

14.0%

60%

38.1%

4.7%

Opening sub-office*1

0%

40%

Relocation

37.6%
28.9%

Expansion in same building

20%

23.8%
26.1%

18.0%

11.9%
15.3%

Spring 2018 (n=111)

20%

40%

60%

80%

61.9%
56.3%

Cost reduction

28.6%
40.6%

Office space efficiency

33.3%
18.8%

Decrease in personnel
Rebuilding or demolition

18.8%

of previous building*3
Business downsizing, M&A

End of temporary use

Other

Spring 2017 (n=21)

14.3%
12.5%
14.3%
0.0%
4.8%
6.3%

Spring 2018 (n=32)(Figures 4–7: Multiple answers; Figures 6 and 7: Excerpts)*1 Sub-office: A separate office for handling some of the main office functions of the head office, etc., located nearby.
*2 New opening: Opening a new office within the same building.
*3 This option was added from the Spring 2018 survey

Metropolitan Areas Office Demand Survey Spring 2018
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
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RESEARCH REPORT｜Xymax Real Estate Institute1-3. Change in office size (actual and potential)
A certain number of companies did not change their office size but had the potential to do so.
Approximately 8% of all companies were considering expansion, or had considered but cancelled orsuspended the plan.

7.9% of companies that saw no changes in their office size over the past year were either considering
expansion or had considered expanding but cancelled or suspended the plan, indicating that they had thepotential to expand. Combined with the percentage of companies that actually expanded their office space, thepercentage of actual and potential expansion amounts to 17.0% (Figure 8).
1.8% of companies were considering downsizing their office, and 0.6% had considered downsizing but
cancelled or suspended the plan. Combined with the percentage of companies that actually downsized theiroffice, the percentage of actual and potential downsizing amounts to 5.1% (Figure 8).

Figure 8: Change in Office Size over the Past Year (Actual + Potential)
0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Office size did not change

Expansion(Actual + Potential)

Office size changed

Currently considering

Expanded

expansion

9.1%

7.0%

Considered, but
cancelled/suspended

Total:

0.9%

17.0%

Office size did not change
Office size

Downsizing(Actual + Potential)changedDownsized
2.7%

Currently

Considered, but

considering

cancelled/

downsizing

suspended

1.8%

0.6%

Total:
5.1%(Spring 2018; single answer; n=1,250)

Metropolitan Areas Office Demand Survey Spring 2018
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
Copyright © 2019 Xymax Real Estate Institute Corporation. All rights reserved.

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RESEARCH REPORT｜Xymax Real Estate Institute1-4. Change in rent per tsubo (details)


43.9% of companies that expanded their office space and 23.5% of companies that downsized theiroffice saw an increase in rent per tsubo.



13.7% of companies that had no changes in their office size saw an increase in rent per tsubo.

Of companies that expanded their office, the percentage of those that replied that their rent per tsubo
increased exceeded that of those that saw a decrease. Similarly, of companies that had no changes in office size,
the percentage of those that saw an increase in rent per tsubo exceeded that of those that saw a decrease by
13.2 points (Figure 9). This indicates that rents are on a rising trend overall not only in newly-signed lease but
also in existing lease as vacancy rates remain low.

Figure 9: Changes in Office Size and Rent per Tsubo0%

Office expanded (n=114)

No change in office size (n=1,076)

Office downsized (n=34)

10%

20%

30%

40%

50%

60%

70%

80%

Rent increased

No change in rent

43.9%

44.7%

Rent increased
13.7%

No change in rent

No change in rent

23.5%

44.1%

100%

Rent Don't know
decreased
8.8%
2.6%

Rent Don't know
decreased
9.7%
0.5%

76.2%

Rent increased

90%

Rent decreased Don't know
17.6%

14.7%

(Spring 2018; single answer)

Metropolitan Areas Office Demand Survey Spring 2018
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
Copyright © 2019 Xymax Real Estate Institute Corporation. All rights reserved.

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RESEARCH REPORT｜Xymax Real Estate Institute

PICK UP
Changes in Office Size and Rent per Tsubo by Company Profile
There were differences in the degree of changes in office size and rent per tsubo by company size,
industry, and office location.
Figure 10 shows the “Office Size Diffusion Index (DI),” the change in office size (the percentage of“expanded” minus that of “downsized”), and the “Rent per Tsubo DI,” the change in rent per tsubo (thepercentage of “increase” in rent per tsubo minus the percentage of “decrease”) over the past year (April
2017–March 2018). The indices have moved to the upper right compared to the Spring 2017 survey,
indicating that office size and rent levels have risen.
▲ By company size (number of employees)
Although the difference in rent per tsubo was small by company size (number of employees),companies with 100–999 employees saw the largest increase in office size.
◆ By industry
DIs for office expansion and increase in rent per tsubo were high in the service and telecommunicationsindustries. They were relatively low in the manufacturing and real estate/lease of goods industries.
● By office location
The DIs for both office expansion and increase in rent per tsubo were high in the Tokyo 23 Wards, as wasin the Spring 2017 survey. Osaka City saw a sharp rise in rent per tsubo, which was low in the previous
survey, while in Nagoya City there was a growth in demand for larger office space.
Figure 10: Office Size DI and Rent DI (Both in the Past)(Rent increased (%) − Rent decreased (%))

Rent DI

25

20

Telecommunications
Construction

1,000 or more

Wholesale / retail

15

Tokyo 23 Wards

Osaka City

Manufacturing

Less than 100

10

100-999

Financial / insurance

ServiceAcademic research /(Those not classified toReal estate /Professional orother sectors)

Leasing of goods

technical service

5

Nagoya City

0
0

2

4

6

8
Office size DI

10(Expanded office (%) − Downsized office (%))

Metropolitan Areas Office Demand Survey Spring 2018
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This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
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12

14(Spring 2018)8

RESEARCH REPORT｜Xymax Real Estate Institute1-5. Impression of office size, business confidence

38.3% of companies felt that their current office was small.



While the business confidence among 33.6% of companies was either “good” or “somewhat good,”
20.7% of companies replied that it was “bad” or “somewhat bad.”

Asked how they felt about their current office size, 38.3% of the companies in total replied that they felt theiroffice was “very small” or “somewhat small.” This is more than the percentage of companies that felt their office
was “very large” or “somewhat large” (13.1%), indicating a potential need for expansion (Figure 11). The
percentage of companies that felt their office was small has also risen from the last three surveys.
Business confidence among more than 30% of the companies was “good” or “somewhat good,” exceeding
the percentage of companies that replied it was “bad” or “somewhat bad” (20.7%) (Figure 12). However,compared to the Spring 2017 survey, not only the sum of “good” and “somewhat good” but also the sum of“bad” and “somewhat bad” slightly increased. Similarly, the aforementioned changes in office size and number
of office users over the past year (pages 3–4) saw a slight increase not only in “increased” but also in “decreased,”suggesting a change in the situation where many companies were able to take advantage of the economic
upswing in terms of business confidence and the resulting office demand.
Figure 11: Impression of Office Size
0%

20%

40%

60%

80%

100%

Autumn 2016 (n=1,124)

5.2%

Spring 2017 (n=1,073)

4.8%

26.8%

50.2%

13.2%

3.6%

Autumn 2017 (n=1,294)

5.2%

27.4%

50.0%

12.4%

3.6%

Spring 2018 (n=1,250)

6.8%

27.8%

52.9%

31.5%

10.9% 2.0%

1.2%

47.9%

1.3%

1.5%

10.2% 2.9%
0.6%

Very small

Somewhat small

Good size

Somewhat large

Very large

No response

Figure 12: Business Confidence
0%

20%

40%

60%

80%

100%

Spring 2017 (n=1,073)

9.3%

22.5%

43.6%

1.9%
15.4% 3.4%
3.9%

Spring 2018 (n=1,250)

9.3%

24.3%

40.3%

15.7% 5.0%

Good

Somewhat good

No change

Somewhat bad

Bad

4.9%

Don't know

No response

Metropolitan Areas Office Demand Survey Spring 2018
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
Copyright © 2019 Xymax Real Estate Institute Corporation. All rights reserved.

0.6%

9

RESEARCH REPORT｜Xymax Real Estate Institute

2．Diversification of Workplaces2-1. Office layoutAlthough there was no significant change from the survey conducted a year ago, spaces that allow
flexible use such as open meeting space and space for refreshing are on a mild increasing trend.

Figure 13 (lower bar) shows the layout of companies’ current offices.
Although there was no significant change from the Spring 2017 survey (Figure 13 (upper bar)), the results
show that spaces allowing flexible use according to users’ needs such as open meeting space and space forrefreshing are on a mild increasing trend. Lockers have also increased by 3.5 points, suggesting that theincrease in the number of office users and shared desks (hot-desking) have had an effect.
Figure 13: Layout of Current Office
0%

20%

40%

60%

80%

93.5%
95.4%

Fixed desks
78.6%
78.4%

Meeting rooms
60.2%
63.7%

Lockers

59.0%
55.8%
51.7%
54.2%

Reception space
Library, warehouse

41.2%
46.2%

Open meeting space
President's/officer's room

35.6%
37.9%

Server room

36.1%
37.0%
29.2%
29.9%

Space to store emergency provisions

32.7%
29.6%
24.9%
28.3%

Changing room

Space for refreshing

16.7%
25.1%

Shared desks (hot-desking)

13.8%
14.8%

Smoking room

10.3%
11.8%

Showroom, seminar space
Cafeteria space

7.1%
8.6%

Shared desks for groups

5.3%
8.0%

ABW*

2.3%
4.2%

Other

1.8%
2.5%

Space for storage battery/emergency power generator

2.1%
2.3%

Nursery space

100%

0.4%
0.3%

Spring 2017 (n=1,073)

Spring 2018 (n=1,250)(Multiple answers)*ABW (Activity Based Working): An office layout that features varied work areas within the office, such as booths that enable workers
to concentrate and space for team work.

Metropolitan Areas Office Demand Survey Spring 2018
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
Copyright © 2019 Xymax Real Estate Institute Corporation. All rights reserved.

10

RESEARCH REPORT｜Xymax Real Estate Institute2-2. Initiatives to support telework“Development and use of work-from-home programs” was the most popular reply (20.6%), while“satellite office,*1 etc. owned or rented by own company” and “use of serviced offices, shared offices,
etc.*2” also increased.

We asked companies about their initiatives to support telework, whether they offered any means of support,
regardless of whether they were for part of or all of the targeted persons.
The “development and use of work-from-home programs” was the most popular reply (20.6%), rising
significantly by 8 points from the results of the survey in Spring 2017. “Satellite office,*1 etc. owned or rented byown company” (8.1%) and “use of serviced offices, shared offices, etc. provided by specialized providers*2”(8.2%) both increased by 2–3 points from Spring 2017 (Figure 14). These results indicate that alternative
workplaces are gradually becoming more available following the recent rise in workstyle reforms.
Figure 14: Places and Programs for Telework
0%

5%

10%

15%

20.6%

7.0%

Other company's offices

9.2%

6.0%

or rented by own company

Serviced office,

25%

12.6%

Work-from-home program

Satellite office, etc. owned

20%

8.1%

5.6%

shared office, etc.

8.2%
Spring 2017 (n=1,073)

Spring 2018 (n=1,250)(Multiple answers; excerpts)*1 Satellite office: An office equipped with the same environment as the main office, located near major train stations or in theoutskirts of cities, mainly in consideration of the commuting and traveling convenience of employees.
*2 Regardless of the details of the contract, such as monthly charges or hourly charges.

Metropolitan Areas Office Demand Survey Spring 2018
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This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
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RESEARCH REPORT｜Xymax Real Estate Institute
The initiatives varied depending on the company size and office location.
By company size, larger companies are more likely to offer alternative places and programs. The results haverisen overall compared to the Spring 2017 survey, with companies with 100–999 employees in particularshowing a 11.7-point rise in work-from-home programs (from 8.9% in Spring 2017) and a 5.1-point rise in the“use of serviced offices, shared offices, etc.” (from 4.8% in Spring 2017) (Figure 15).
By office location of the three major areas (Tokyo 23 Wards, Osaka City, Nagoya City), the rate of introductionof means of telework was the highest in Tokyo 23 Wards in almost all of the options, indicating that there is aregional difference in accommodating alternative workstyles (Figure 16).
Figure 15: Availability of Places/Programs for Telework – By Company Size (% in brackets: Spring 2017 survey)etc.

Work-fromsatellite office,

5%

10%

15%

20%

Up to 99 (n=605)

25%

30%

35%

16.9%（10.9%）

100–999 (n=465)

20.6%（8.9%）
33.3%

1,000 or more (1=180)（25.9%）Up to 99 (n=605)

4.8%（3.6%）

100–999 (n=465)

8.8%（6.6%）

1,000 or more (1=180)

17.2%（11.5%）

Up to 99 (n=605)

etc.

shared office,Company's
Serviced office,home program0%

5.1%（5.0%）

100–999 (n=465)

9.9%（4.8%）

1,000 or more (1=180)

14.4%（9.2%）

Figure 16: Availability of Places/Programs for Telework – By Office Location (% in brackets: Spring 2017 survey)

program
etc.

home

5%

10%

15%

20%

Tokyo 23 Wards (n=799)
Osaka City (n=131)

Nagoya City (n=83)

14.5%（6.1%）
9.4%（6.2%）

4.6%（5.8%）
3.6%（1.8%）

Tokyo 23 Wards (n=799)

10.1%（7.7%）

Osaka City (n=131)
Nagoya City (n=83)30%

9.2%（7.0%）

Nagoya City (n=83)

Osaka City (n=131)

25%

24.4%（16.0%）

Tokyo 23 Wards (n=799)

office, etc.

Company's
Serviced

office, shared satellite office,Work-from-0%

6.1%（3.5%）
1.2%（0.9%）(Figures 15, 16: Spring 2018, multiple answers, excerpts)

Metropolitan Areas Office Demand Survey Spring 2018
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
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RESEARCH REPORT｜Xymax Real Estate Institute
By industry, the introduction rate was relatively high in the telecommunications sector for all options. All
options increased in general compared to the Spring 2017 survey, with the “use of serviced offices, sharedoffices, etc.” exceeding 10% in the telecommunications and service industries (Figure 17).

Figure 17: Availability of Places/Programs for Telework – By Industry (% in brackets: Spring 2017 survey)
5%

10%

20%

25%

30%

31.9%

Telecommunications (n=163)（27.7%）

Wholesale, retail (n=200)

16.0%（4.6%）

Service* (n=283)

22.6%（11.4%）
6.3%（6.1%）
11.7%（7.8%）

Wholesale, retail (n=200)

8.0%（5.2%）

Service* (n=283)

8.5%（4.7%）

Manufacturing (n=191)

7.9%（8.9%）

Telecommunications (n=163)
Wholesale, retail (n=200)

35%

17.8%（13.9%）

Telecommunications (n=163)

etc.

15%

Manufacturing (n=191)

Manufacturing (n=191)

office, etc.

Serviced office, shared

Company's satellite office,Work-from-home program

0%

11.7%（6.4%）
3.5%（2.3%）

Service* (n=283)

11.7%（8.1%）(Spring 2018; multiple answers; excerpts)*Those not classified to other sectors.

Metropolitan Areas Office Demand Survey Spring 2018
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RESEARCH REPORT｜Xymax Real Estate Institute

3．Outlook of Office Demand
3-1. Outlook of the number of office users and office size

41.1% of companies replied that the number of office users “will increase,” significantly exceeding
those that replied that it “will decrease” (5.2%).



Similarly, 23.5% of the companies said they intended to expand their office space, exceeding thepercentage of the companies that said they intended to downsize their office (4.6%), indicating thatthe strong demand for office space is likely to continue.

We asked the companies about their expectations of the number of users of their current office in one to two
years' time. 41.1% of the companies replied that the number of users will increase, considerably more than thepercentage of companies that said the number will decrease (5.2%) (Figure 18). Similarly, in terms of companies’
intentions toward office size in two to three years’ time, more companies wanted to expand (23.5%) thandownsize (4.6%) (Figure 19), indicating that office demand is likely to remain robust as was in the Spring 2017
survey. The results also indicate that both the number of office users and the size of office saw a rise in “willincrease/want to expand” and “will decrease/want to downsize,” compared to the previous survey.
Figure 18: Change in the Future Number of Office Users
0%20%

Spring 2017 (n=1,073)

40%

60%

34.3%

Spring 2018 (n=1,250)

44.7%

41.1%

Will increase

80%

4.8%

39.6%

No change

Will decrease

100%

16.2%

5.2%

14.1%

Don't know

Figure 19: Future Intention concerning Office Size0%

Spring 2017 (n=1,073)

Spring 2018 (n=1,250)

20%

40%

49.2%

17.2%

48.9%

23.5%

Want to expand60%

Not change

Want to downsize

80%

100%

29.7%

3.8%

4.6%

23.0%

Don't know

Around 40% of companies that wanted to expand their office wanted to expand by relocating (Figure 20). As
mentioned in “1-2. Change in office size (details)” (pages 4–5), many companies seem to have actually
expanded their office by relocating. The order was different in the Spring 2017 survey, with “expansion in thesame building” ranked top. As for the reason for wanting to expand, the top replies were “office space became
too small due to an increase in personnel” (69.4%) and “to respond to personnel increase due to future increasein hiring” (41.9%), followed by “for greater comfort in the office environment” (39.5%) (Figure 22).

Metropolitan Areas Office Demand Survey Spring 2018
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RESEARCH REPORT｜Xymax Real Estate Institute
In terms of the form of downsizing, “downsizing by relocating” exceeded “downsizing in the same building”
and ranked top, as in the Spring 2017 survey (Figure 21). In terms of the reason for wanting to downsize, “dueto a decrease in personnel” rose by 11.5 points, which is believed to be partly related to the increase incompanies that replied that their future number of office users will decrease, as seen in Figure 18 (Figure 23).
Figure 20: Form of Intention to Expand
0%

20%

40%

Figure 21: Form of Intention to Downsize
0%

80%

40.0%
44.2%

Relocation
Expansion in same building
11.4%
13.6%

New opening*2

10.8%
12.6%

Consolidation and relocation

2.4%
5.2%

Cancellation of sub-office*1

4.9%
1.7%

Other

2.4%
1.7%

Spring 2017 (n=41)

Spring 2018 (n=294)

Figure 22: Reason for Intention to Expand
0%

20%

40%

60%

0%

80%

50%

100%
53.7%

Cost reduction

63.8%

50.8%
41.9%

For future increase in hiring
For greater comfort

39.2%
39.5%

Not enough meeting rooms

37.0%
36.8%
23.2%
24.4%

To motivate employees
To achieve greater sales

11.6%
11.0%

Business expansion, M&A

10.5%
10.7%

Corporate brand improvement

12.2%
10.0%
6.6%
10.0%

Temporary use

1.7%
3.8%

Support for childcare/elderly care

1.7%
2.1%

Other

Spring 2018 (n=58)

Figure 23: Reason for Intention to Downsize

59.7%
69.4%

Increase in personnel

New business

7.3%
19.0%

Don't know, not yet decided

13.5%
11.2%

Spring 2017 (n=185)

Spring 2017 (n=181)

39.0%
31.0%

0.5%
2.0%

Don't know, not yet decided

5.0%
5.2%

Spring 2018 (n=291)

100%

61.0%
50.0%

Downsizing in same building

5.9%
3.4%

Consolidation and relocation

50%

Relocation

57.3%

40.5%

Opening sub-office*1

Other

60%

46.3%

Office space efficiency

41.4%

19.5%

Decrease in personnel

Consolidation

Business downsizing, M&A

Other

31.0%

7.3%
5.2%

4.9%
1.7%

7.3%
5.2%

Spring 2017 (n=41)

Spring 2018 (n=58)(Figures 20–23: Multiple answers)*1 Sub-office: A separate office for handling some of the main office functions of the head office, etc., located nearby.
*2 New opening: Opening a new office within the same building.

Metropolitan Areas Office Demand Survey Spring 2018
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RESEARCH REPORT｜Xymax Real Estate Institute

PICK UP
Changes in Office Size (Past and Future) by Company Profile
Figure 24 shows the Office Size DI (the percentage of “expanded” minus that of “downsized”) of thepast year (April 2017–March 2018) and the future Office Size Intention DI (the percentage of “want toexpand” minus the percentage of “want to downsize”).
▲ By company size (number of employees)
Companies with 100–999 employees had strong intentions to expand their office space, showing asignificant rise from the Spring 2017 survey. On the other hand, companies with 1,000 employees or more
had fewer intentions to expand than companies with less than 1,000 employees.
◆ By industry
The result show that office demand in the telecommunications sector was and is expected to be strong.
The academic research/professional or technical service industry had strong intentions to expand, while
the many companies in the service industry actually expanded their office. Both actual expansions andintentions to expand were relatively low in the manufacturing, wholesale and retail industries.
● By office location
Office demand was and is expected to be relatively strong in the Tokyo 23 Wards. In Osaka City, while
expansion of office size was relatively low in the past, future intentions to expand has risen from theSpring 2017 survey.
Figure 24: Office Size DI (Past and Future)
35
Academic research /Professional or

30

Office size intention DI(Want to expand (%) − Want to downsize (%))

technical service

Financial / Insurance

Telecommunications

25
100-999

Construction

20

Tokyo 23 Wards
Less than 100(Those not classified toReal estate /15

Serviceother sectors)

Leasing of goods

Osaka City

1,000 or more

Construction

10
Nagoya City
Wholesale / Retail

5

0
0

2

4

6

8

10

12

Office size DI

14(Spring 2018)(Expanded office (%) − Downsized office (%))
Metropolitan Areas Office Demand Survey Spring 2018
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16

RESEARCH REPORT｜Xymax Real Estate Institute3-2. Matters of importance, concerns and obstacles in implementing office strategiesWhat companies placed the most importance on when implementing office strategies was“productivity improvement” (65.8%). Matters related to employee satisfaction ranked high, such as“improvement of employees’ motivation” (62.4%) and “greater comfort of office environment”(45.3%).

As for concerns and obstacles in implementing office strategies, matters related to cost dominatedthe top rankings. Matters concerning internal coordination also rose, such as “coordination with thesystems department” (19.8%) and “lack of department/person to implement the strategies in across-sectional manner” (13.8%).

What companies placed importance on when implementing office strategies were as below (Figure 25 (lowerbar)). Although the rank order of the items was mostly unchanged from the Spring 2017 survey, thepercentages have grown in almost all items, suggesting a rise in awareness toward the development of a better
office environment for employees. Also, while “reduction of office costs” saw a drop in percentage,“improvement of employees’ motivation” and “greater comfort of office environment” saw a rise by 7.1 points
and 5.0 points, respectively, indicating a trend of placing emphasis more on matters related to employee
satisfaction than on cost awareness.
Figure 25: Matters of Importance in Implementing Office Strategies
0%

10%

20%

30%

40%

50%

60%

60.0%
65.8%
55.3%
62.4%

Productivity improvement
Motivation improvement

46.1%
50.7%
44.3%
48.4%

More active communication
Operational efficiency

40.3%
45.3%
36.4%
34.1%

Greater comfort of office environment

Reduction of office costs
Improvement of employee satisfaction*

33.4%
27.0%
31.8%
24.8%
28.7%
23.3%
27.9%
19.8%
22.6%

Improvement of health
Better work-life balance
Rectifying long working hours
Recution of travel costs

15.5%
21.7%
18.5%
19.8%
14.2%
19.5%
18.9%
18.0%
15.5%
17.4%
14.1%
15.0%
10.9%
11.9%

Enhancement of hiring

Improvement in customer service/satisfaction
Reduction of turnover rate
Office space efficiency
BCP
Assisting in childcare and elderly care
Utilization of diverse personnel
Greater innovation
Other
None in particular, don't know

70%

0.7%
0.4%
5.1%
3.0%

11.4%
11.4%

(Multiple answers)*Option added from the Spring 2018 survey

Spring 2017 (n=1,073)

Spring 2018 (n=1,250)

Metropolitan Areas Office Demand Survey Spring 2018
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RESEARCH REPORT｜Xymax Real Estate Institute
As for concerns and obstacles in implementing office strategies, more than 40% of the companies chose“heavy cost burden,” which was also the top reply in the Spring 2017 survey (41.8%) (Figure 26). Furthermore,since the office market in metropolitan areas have remained tight, it is assumed that concerns toward the risk of
the rise in rent levels are increasing.
In this survey, we focus on the fact that matters related to internal coordination such as “coordination withthe systems department” and “lack of department/person to implement the strategies in a cross-sectionalmanner” saw a rise in percentage. This suggests that companies are increasingly facing difficulty inimplementing office strategies with workstyle reforms in mind—not conventional office strategies for office size
purposes such as expansion to accommodate an increase in personnel—namely, in internal coordination andthe lack of drivers of the strategies.
Figure 26: Concerns and Obstacles in Implementing Office Strategies
0%

10%

20%

30%

40%

41.8%
43.3%

Heavy cost burden
31.1%

Unclear cost effectiveness

25.0%
19.1%
24.0%

Risk of rise in rent levels
10.7%

Coordination with systems department

19.8%
16.0%
18.1%

Inability to obtain approval of management

13.5%

Inability to find a building that meets requirements

16.6%
19.6%

Troublesome

15.4%
10.9%
14.2%

Coordination with personnel department

8.2%

Lack of department/person to implement the strategies

13.8%
4.8%

Lack of knowledge of appropriate way to implement/introduce

Inability to obtain understanding from managers

7.4%
3.4%
5.8%
4.5%
5.6%

Inability to obtain understanding of employees

Other

0.7%
1.9%
21.2%

None in particular

No response

Spring 2017 (n=1,073)

50%

17.8%
4.3%
1.6%

Spring 2018 (n=1,250)(Multiple answers)

Metropolitan Areas Office Demand Survey Spring 2018
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RESEARCH REPORT｜Xymax Real Estate Institute

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Office Space per Person by Companies' Telework Availability
There was a difference in the office space per person between companies that offer teleworking places
for employees and companies that do not (Figure 27).
In all four major telework styles, companies that offered such means had a smaller office space perperson than companies that did not offer such means. We believe that the diversification of places where
employees work, brought about by companies’ efforts to accommodate telework, may have had an
impact on the efficiency of office space.
Figure 27: Office Space per Person by Companies' Telework Availability

programoffices

Introduced (n=212)

etc.

3.04

Not introduced (n=876)
Introduced (n=90)

3.97
3.04

Not introduced (n=998)
Introduced (n=77)

3.76

3.00

Not introduced (n=1,011)
Introduced (n=75)

etc.

home
company's
office,*2

office*1,

Work-fromOther
satellite
sharedoffice,Serviced

Company's

0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50

3.78
2.86

Not introduced (n=1,013)

3.77(Spring 2018; tsubo)*1 Satellite office: An office equipped with the same environment as the main office, located near major train stations or in theoutskirts of cities, mainly in consideration of the commuting and traveling convenience of employees.
*2 Regardless of the details of the contract, such as monthly charges or hourly charges.

Metropolitan Areas Office Demand Survey Spring 2018
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19

RESEARCH REPORT｜Xymax Real Estate Institute4．Summary
As we saw in “1-1. Changes in the number of office users, size of office, and rent per tsubo (incl. CAM
charges)” (pages 3–4), the changes in all three items over the past year were larger in the increase than in thedecrease as if to correspond to companies’ business confidence, indicating the continuance of robust officedemand. Furthermore, “3-1. Outlook of the number of office users and office size” (page 14) showed that theoutlook that office users will increase and the intention of companies to expand their office size both rose frompast surveys, which suggest that office demand will remain robust. However, we will pay attention to future
trends, as there are some contrasting moves such as the slight rise of the percentage of companies that are
cautious in business confidence and of those that intend to downsize their office in the future.
As illustrated in Figure 14, work-from-home programs have become substantially more available, and third
place offices* are also gradually being introduced and used. In terms of the availability of places for telework bycompany size, large companies offer relatively more places and programs for telework. However, in this survey
we focus on the fact that medium-sized companies with 100–999 employees have made greater efforts inaccommodating telework than in the past surveys (Figure 15). With the government promoting measures toencourage telework in order to achieve workstyle reforms, places for telework may continue to become moreavailable.
On the other hand, Figure 26 indicates that issues in implementing office strategies have become more
complex than before, as suggested in the rise of the percentage of companies replying that internal
coordination across several departments and the lack of a person in charge are a concern or obstacle incarrying out office strategies. Office strategies aimed at better workstyles are becoming more difficult and are
one of the most important management strategies for companies.
The reduction in office space per person associated with more varied workstyles, as seen in Figure 27, may also
affect office demand. As the number of office workers is expected to continue to rise, the growth in the demandfor office space is also expected to remain strong. On the other hand, the transition to a more flexible workstylethat is not bound to fixed offices is forecast to accelerate, which may lead to a reduction in conventional officespace such as in head offices, as workplaces diversify to many alternative places through the acceleration of theintroduction and use of work-from-home programs, serviced offices and shared offices. It will also be necessary
to focus on the qualitative changes in office demand resulting from social factors such as workstyle reforms, inaddition to quantitative changes such as the number of office users.

*Third place office: Office space other than the company’s office or employees’ homes, provided mainly by service providers. Includes
satellite offices, serviced offices, shared offices, mobile work offices, and co-working space. The party to the contract may be either thecompany or individual.

Metropolitan Areas Office Demand Survey Spring 2018
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RESEARCH REPORT｜Xymax Real Estate Institute

Survey Overview
Survey period

April 2018

Targetrespondents

3,935 companies
・Companies that are tenants of office buildings managed by the Xymax Group・Client companies of XYMAX INFONISTA Corporation

Valid
responses

1,250 companies

Geographicalcoverage

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

Survey method

By email and questionnaire sheet

Response rate: 32%

Current office
・ Office type, location, contracted area, number of office users, impression of office size, rent per
tsubo (incl. CAM charges)
Actual office use and changes (April 2017 – March 2018)
・ Actual office layout and changes
・ Actual workplace and changes, the reason for the change
・ Change in number of office users
・ Change in office size, the details and reason for the change
・ Change in rent per tsubo
Topics coveredin the survey

Outlook of future office demand・ Business confidence・ Outlook of change in number of office users
・ Intention to change office size, the details and reason for the intention
・ The ideal form of office・ Important matters, concerns and obstacles in office strategies
Company profile
・ Industry, head office location, number of employees, year of establishment
Respondent profile・ Department, position, age group

Metropolitan Areas Office Demand Survey Spring 2018
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This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
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21

RESEARCH REPORT｜Xymax Real Estate InstituteProfile of Respondent Companies (Upper row: %; Lower row: number)
Industry
Academic research /Service
Wholesale / Retail(those not classified to

Manufacturing

Telecommunications

Construction

Professional or
technical service

other sectors)

22.6%

16.0%

15.3%

13.0%

5.8%

5.8%

283

200

191

163

73

72

Unclassifiable

Real estate /industries

Leasing of goods

Financial / Insurance

Multi-service

Transportation /Education / Learningbusiness

Postal service

support

4.1%

3.8%

3.0%

2.0%

2.0%

1.8%

51

48

37

25

25

23

Medical / Welfare

Daily life services /Electricity, Gas, Heat,Entertainment

Water

Accommodation /Civil service

Food & beverage(excl. those classified

serviceto other sectors)

Agriculture /Forestry

1.4%

1.2%

0.9%

0.6%

0.6%

0.1%

17

15

11

8

7

1

Sales office

Other

Number of employeesType of office
Head office

Branch officeSub-officeCall center

Computer room

61.7%

25.8%

9.0%

1.8%

1.4%

0.3%

0.1%

771

323

112

22

17

4

1

Location of office
Tokyo 23 Wards

Osaka City

Nagoya City

Fukuoka City

Other

63.9%

10.5%

6.6%

5.8%

13.2%

799

131

83

72

165

Size of office under lease contract in tsubo
Up to 30 tsubo

Up to 50 tsubo(1 tsubo = 3.3 sqm)

Up to 100 tsubo

Up to 200 tsubo

Over 200 tsubo

No response

18.5%

15.4%

19.5%

16.8%

23.8%

6.0%

231

192

244

210

298

75

The percentage mix in the charts contained in this report are rounded to the first decimal place and therefore may not add up to 100%.
Figures 6, 7, 14, 15, 16, and 17 are excerpts of the top replies and items common in the Spring 2017 survey and this survey.

Contact for inquiries concerning this report
Xymax Real Estate Institutehttps://soken.xymax.co.jp TEL: +81 3 3596 1477 | FAX: +81 3 3596 1478 | E-MAIL: info-rei@xymax.co.jp

Metropolitan Areas Office Demand Survey Spring 2018
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
Copyright © 2019 Xymax Real Estate Institute Corporation. All rights reserved.

22