Xymax Real Estate Institute

RESEARCH REPORTTOKYO 23 WARDS | Supply of New Office Space 2019
December 12, 2018

Xymax Real Estate Institute (hereinafter, “Xymax REI”) hereby releases a report on the Supply of New Office
Space 2019 covering the Tokyo 23 Wards. The volume of new office supply, which is an aggregation ofrentable areas of offices that will be newly constructed in the coming years (hereinafter, “new supply”),indicates the future direct impact of supply on the market balance. Xymax REI aggregates the rentable areas ofoffice space in buildings that are mainly for office-use with a gross floor area of more than 3,000 tsubo
completed in the Tokyo 23 Wards and Osaka City each year. The Osaka City version*1 has been released on thesame day.
*1 “OSAKA CITY | Supply of New Office Space 2019” December 12, 2018https://www.xymax.co.jp/english/news_research/?type=research

1 tsubo = approx. 3.3 sqm
SUMMARY OF RESULTS

New supply of 159,000 tsubo and 237,000 tsubo are planned in 2019 and 2020, respectively, while new
supply in 2021 and 2022 are currently forecast at 102,000 tsubo and 53,000 tsubo, respectively, both thesmallest amounts since 2009 (Figure 1).
The average annual new supply in 2019–2022 is 138,000 tsubo, falling below 172,000 tsubo, the annual
average annual of the past 10 years.
63% of new supply in 2019–2022 is concentrated in the three central wards of Chiyoda, Chuo andMinato.
The new supply rate (new supply in 2019–2022 versus office stock at year-end 2018) is expected to beapprox. 4.4% (annual average: 1.1%) in the Tokyo 23 Wards.
Figure 1: Tokyo 23 Wards’ Supply of New Office Space (Net Rentable Area)

TOKYO 23 WARDS | Supply of New Office Space 2019
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. TOKYO 23 WARDS | Supply of New Office Space
New supply of office buildings with a gross floor area of more than 3,000 tsubo is expected to be 159,000
tsubo in the Tokyo 23 Wards in 2019, falling below 172,000 tsubo, the annual average for 2009–2018(hereinafter, the “10-year average”). The planned supply in 2020 is around 237,000 tsubo, exceeding the10-year average.
However, new supply in 2022 is currently expected at 53,000 tsubo, the smallest amount since 2009. The
annual average for 2019–2022 is 138,000 tsubo, falling below the 10-year average as well as decreasing fromour previous study in 2017*2 for 2018–2021 (180,000 tsubo).
Looking at large buildings with a gross floor area of 10,000 tsubo or more, new supply of 138,000 tsubo isplanned in 2019, which is a 29,000-tsubo decrease from our previous study, due to a change in the scheduled
completion of a large development in Yotsuya to 2020 and some projects being owner-occupied buildings.
2020 is expected to see one of the largest supplies to date of 225,000 tsubo. However, the expected averageannual volume in 2019–2022 is 126,000 tsubo, which is below the 10-year average of large buildings of 133,000
tsubo, since new supply will be small in 2021 and 2022 at 92,000 tsubo and 48,000 tsubo, respectively.
The new supply rate, which is the percentage of new supply in 2019–2022 to office stock at year-end 2018, is4.4% (annual average: 1.1%) in the Tokyo 23 Wards.
*2 “TOKYO 23 WARDS | Supply of New Office Space 2018 & Office Stock Pyramid 2018” December 7, 2017https://www.xymax.co.jp/english/news_research/?type=research

2. New Supply by Area
By area, 63% of total new supply in 2019–2022 is planned in the three central wards (Chiyoda, Chuo andMinato). If we look at the five central wards (three central wards + Shibuya and Shinjuku), 79% of total new
supply is planned in the wards, indicating a concentration of supply in central Tokyo (Figure 2).
Figure 2: New Supply by Area (2019–2022)

TOKYO 23 WARDS | Supply of New Office Space 2019
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.

2RESEARCH REPORT｜Xymax Real Estate InstituteThe highlights of the major areas are as follows.
〇 The Toranomon area will see continued supply due to large-scale redevelopments, including
infrastructure developments such as Beltway 2, a new subway station and a Bus Rapid Transit (BRT)system, and hotel/medical compound facility developments.
〇Marunouchi-Otemachi-Yurakucho, the prime office district in central Tokyo, will see an average annual
new supply of 54,000 tsubo in 2019–2022, around half of the annual average in 2018–2021 released in
our previous study in 2017, since large projects such as Otemachi Place, Marunouchi Nijubashi Building
and Tokyo Midtown Hibiya were completed in 2018. Several large development projects are planned in2020 but are not reflected in new supply since they are owner-occupied buildings.
〇In Nihombashi-Yaesu-Kyobashi, a large amount of supply is planned in 2022 due to the Yaesu 2-chome
North District Class One Urban Redevelopment Project.
〇In Shibuya and Jinnan-Udagawacho-Dogenzaka areas, supply by several large-scale developments isplanned in 2019.

Survey Overview
Survey dateNovember 2018

Area

Tokyo 23 Wards

Targetproperties

Properties with a gross floor area of 3,000 or more that are used mainly as office space(excluding owner-occupied buildings)

Target data

Rentable office area (tsubo)

MethodPrimarily through publicly available information such as newspaper articles, in addition to
on-site surveys and interviews with developers* The target of this survey is the floor area of buildings to be newly supplied. Note that this is not a complete survey.
* Published rentable areas are used in the study, wherever they are available. Where not, the study uses the area estimated fromgross floor area based on a formula derived from the joint development with Naoki Kato Lab, Architecture and ArchitecturalEngineering, Kyoto University Graduate School of Engineering.
* The new supply estimated in this survey is the estimated amount as of the date of the survey. The figures of new supply change as
information is added and updated on a daily basis.

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

TOKYO 23 WARDS | Supply of New Office Space 2019
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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