Survey of Large-scale Office Building Supply
in Tokyo’s 23 wards 2015

April 22,2015

Since 1986, Mori Trust Co., Ltd. (Head Office: Minato-ku, Tokyo) has surveyed trends in the supply of large-scale office buildings
containing total office space of 10, 000 square meters or more within Tokyo’s 23 wards , based on various published materials,
field surveys, and interviews. The results of the most recent surveys(including the survey of mid-size office buildings) arepresented below.In the calculation of total office floor area, where the survey deals with multi-purpose buildings—buildings
coupled with stores, living quarters or residences, hotels, etc.—only the floor area purely for office use is taken into
consideration.
[Survey Date: December 2014]

Supply of large-scale office buildings to tighten slightly over the medium term
–2017 supply at second-lowest level in 20 years–
Main Results of This Survey
１.Supply of large-scale office buildings

Office supply in 2014 was 920,000 square meters, falling short of the average for the
past 20 years (1,050,000 square meters per year). While some years during the2015-18 span may exceed this past average, in 2017, supply is expected to decline
sharply, due in part to revised construction timetables for large-scale projects, to thesecond lowest level over the past 20 years. The 2015-18 average is also expected to beslightly below the past average.

２.Supply trends by area

In 2015-18, supply in Tokyo’s three central wards is projected to exceed 70% of total
supply, as the trend toward greater concentration in central Tokyo accelerates. Supply
in Chiyoda Ward will constitute over 30% of the total, maintaining the top share, while
Minato Ward’s share will increase significantly to over 20%. By district, supply in the
Otemachi/Marunouchi/Yurakucho district will further increase, and supply in the top
three districts, including the Yaesu/Nihonbashi/Kyobashi and Akasaka/Roppongi
districts, will account for nearly 50% of the total supply.

３.Supply trends by type of development site

In Tokyo’s three central wards in 2015-18, supply provided through rebuilding willremain at high levels, accounting for around 80% of the total supply. Supply throughredevelopment of undeveloped/underdeveloped land is also expected to continue. At
the same time, outside of the three central wards, supply on undeveloped/underdeveloped land will constitute approximately 70% of the total supply, while
supply through rebuilding will be limited to around 30%.

４.Supply of mid-size office buildings

Supply in 2014 was 112,000 square meters, lower than the 10-year average (128,000
square meters per year). In 2015-16, supply is also expected to be significantly lower
than the past average. As with large-scale buildings, supply continues to beconcentrated in central Tokyo. Supply in Tokyo’s three central wards is expected toaccount for over 70% of the total supply. Minato Ward will account for the largest
share of supply (around 40%), with a significant increase in supply at the
Toranomon/Shinbashi district, where ultra-large-scale development and infrastructure
improvement projects are underway. Development by major developers has increased
in recent years.

For further information, contact:
Keiji Kurokawa
Research & Planning,Building Leasing Department
Mori Trust Co., Ltd. http://www.mori-trust.co.jp
Toranomon 2-chome Tower, 3-17 Toranomon 2-Chome, Minato-ku, Tokyo 105-0001 JAPANE-Mail: kurokawa-k@mori-trust.co.jp

１. Supply of large-scale office buildings
In 2014, supply of large-scale office space in Tokyo’s 23 wards was 920,000 square meters,
below the average for the past 20 years (1,050,000 square meters). After 2013, when supply was
also low, at 660,000 square meters, 2014 marked the second consecutive year of supply failing tomeet the average. (See Chart 1-1 on the next page.)
Supply in 2015 is expected to increase to 1,200,000 square meters, around 10% above the past
average. Supply is also expected to exceed the past average in 2016 and 2018. By contrast, in
2017, supply is projected to come in at 570,000 square meters, the second lowest level seen overthe past 20 years. While the previous survey pointed to above average figures, due to revised
construction timetables for large-scale projects and other factors, this figure is now expected to bearound half of the previous figure. (See Chart 1-1 on the next page.)With respect to supply from 2015 on, the supply in Tokyo’s three central wards, except in 2017, is
expected to be 20-30% above the past average. In Tokyo’s other wards, supply is projected to fallshort of the past average, as the trend toward concentration of supply in central Tokyo has
continued to strengthen. (See Chart 1-2 on the next page.)With regard to supply trends by scale in 2015-18, supply of large-scale buildings containing
50,000 square meters or more of office space is expected to increase dramatically, accounting for arecord-high percentage of roughly 80% of the total supply. (See Chart 1-3 on the next page.)
As this suggests, supply going forward will center on ultra-large-scale buildings in Tokyo’s three
central wards, where demand is high, and the average supply during the 2015-18 period is
expected to fall short of the past average, at approximately 1,000,000 square meters per year.
Therefore, the current favorable supply-demand balance is expected to remain in place for theforeseeable future.

2 . Supply trends by area
In 2015-18 the ongoing shift of supply area toward central Tokyo is expected to accelerate, with
supply in Tokyo’s three central wards projected to account for more than 70% of the total supply.
Chiyoda Ward’s share will continue to remain at the top, over 30% of the overall supply, and Minato
Ward’s share will increase significantly, exceeding 20%; as a result, the shares of Shinjuku Ward,
Shibuya Ward, Shinagawa Ward, and Koto Ward will each represent less than 10% of total supply.
(See Chart 2-1 on the 4th page.)In terms of supply by business district, supply in the Otemachi/Marunouchi/Yurakucho district is
expected to increase further. The shares of Yaesu/Nihonbashi/Kyobashi and Akasaka/Roppongi will
also increase. Overall, the top three districts in Tokyo’s three central wards will account for nearly
50% of total supply. With respect to the changing ranking of the top ten business districts in terms ofsupply, seven of the top ten will be districts in the three central wards in 2015-18. Of districts ranked
in the top ten in 2011-14 and located in non-central wards, only the Osaki/Gotanda district willremain ranked. (See Chart 2-2 on the 4th page.)

2/11

【Chart 1-1】Supply trends for large-scale office buildings in Tokyo’s 23 wards
Oﬃce supply in completed buildingsOﬃce supply in buildings under construction
Oﬃce supply in buildings to be constructed

43
36

33

29

29

22

23

(10,000㎡)

17

250

14

27

26

27

32

29

24

21

20

16

29

19

20
14

18

12

Number of supply

Number of supply

40
30

25
16

20

14

10

221
200

50

2011-2014 average supply:
1,160,000㎡/year

1995-2014 average supply:
1,050,000㎡/year0

2015-2018 average supply:
1,010,000㎡/year181

Supply volume

162
150
119

118

99
100

92

89
74

0

120

90

121

118

108

82

72

50

126

119

118

106

117

92

82
66

64

57

36

'95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18'15 '16 '17［previous report］【Chart 1-2】Tokyo’s three central wards and 【Chart 1-3】Supply and ratio by building scaleother wards
Tokyo’s
three central wards

Other wards

1995-2014 average supply:
660,000㎡/year

1995-2014 average supply:
390,000㎡/year(10,000㎡)

100(10,000㎡)

79

90

82

100

64
48

50

50

41
28
9

'15 '16'17 '1852%(440,000㎡/year)

48%(400,000㎡/year)'00−'0456%(690,000㎡/year)

44%(550,000㎡/year)'05−'0959%(610,000㎡/year)

41%(420,000㎡/year)'10−'1466%(730,000㎡/year)'15−'1826

0'95−'99

0'15 '16'17 '180%34%(370,000㎡/year)

79%(800,000㎡/year)

20%

40%

Buildings of 50,000㎡ or larger

21%(210,000㎡/year)

60%

80%

100%

Buildings of less than 50,000㎡

3/11

【Chart 2-1】Supply of large-scale office space by ward
［2011−2014］［2015−2018］

Tokyo’s three central wards :2,800,000㎡（60%）
Other wards :1,850,000㎡（40%）

Koto
11%
Chiyoda34%

Shibuya5%
Shinjuku
9%Minato14%

Other wards :1,040,000㎡（25%）

Supply(10,000㎡）

Other wards
9%

Shinagawa6%

Tokyo’s three central wards :2,990,000㎡（75%）

Chiyoda

159

Chuo

56

Minato65

Shinjuku

41

Shibuya21

Shinagawa

31

Koto

50

Others

42

Chuo
12%

Supply(10,000㎡）
Chiyoda

144

9%

Chuo

59

Shibuya6%

Minato96

Shinjuku

24

Shibuya25

Shinagawa37

Other wards
4%
ShinagawaShinjuku
6%

Chiyoda36%
Minato
24%

Chuo
15%

Koto

0

Others18【Chart 2-2】Top ten districts［2011－2014］（10,000㎡）
93
（20％）
70

2011
2012
2013
2014

Supply volume

60
50
40

33
（7％）

29
（6％）

26
（6％）

26
（6％）

30

24
（5％）

23
（5％）

21
（4％）

19
（4％）

16
（4％）

ToyosuNakanoShinjuku

20
10
0

Yaesu
Otemachimarunouchi Nihonbashi
Yurakucho Kyobashi

Osaki
GotandaAkasaka
Toranomon Jinbocho
Shinbashi Ogawamachi Roppongi

NishiShinjuku［2015－2018］（10,000㎡） 111
（27％）
60

2015
2016
2017
2018

Supply volume

50
40

47
（12％）

30

35
（9％）

30
（7％）

19
（5％）

Akasaka
Roppongi

Osaki
Gotanda

Konan

3（6）

4（3）

18
（4％）

14
（3％）

14
（3％）

13
（3％）

12
（3％）

Kojimachi Ichigaya
Hirakawacho
Kioicho

Shibaura
KaiganShibuya

Shibakoen
Hamamatsucho

20
10
0

Rank

Yaesu
Otemachimarunouchi Nihonbashi
Yurakucho Kyobashi（ ）for previous
timeframe

1（1）

2（2）

5（−）

6（−）

7（−）

8（−）

9（−）

10（−）

4/11

【Chart 2-3】Supply volume in the key business districts［2011−2014］

Oshiage

NakanoNishi-Shinjuku

Chiyoda Ward

Shinjuku

Iidabashi
Jinbocho
Kudan
Ogawamachi
Kojimachi Fujimi
Muromachi
Hirakawacho
HonchoOtemachi
KioichoMarunouchi
Yaesu
Yurakucho
Nihonbashi
Uchisaiwaicho
KyobashiKasumigaseki
Nagatacho

Yoyogi

Chuo Ward

JinnanUdagawacho
Dogenzaka

Akasaka
Roppongi

Ginza

Toyocho

Toranomon
ShinbashiToyosuShibuyaMinato Ward
Shibaura
KaiganMeguroKamiosaki

Approx.supply volume：400,000㎡〜：200,000㎡〜400,000㎡

Osaki
GotandaRinkai：100,000㎡～200,000㎡： 50,000㎡～100,000㎡［2015−2018］
Ueno
Okachimachi

Okubo

IchigayaJinbocho
Chiyoda Ward Ogawamachi
Kojimachi
Hirakawacho
Kioicho Otemachi
Marunouchi
Yurakucho
Yaesu
Nihonbashi
Uchisaiwaicho
KyobashiKasumigaseki
Nagatacho

Sendagaya
Jingumae

Chuo Ward

Ginza

Akasaka
Roppongi
Shibuya

Shibakoen
Hamamatsucho

Minato Ward
Shiba
Mita

Shibaura
KaiganApprox.supply volume：400,000㎡〜：200,000㎡〜400,000㎡

MeguroKamiosaki

Konan

Osaki
Gotanda：100,000㎡～200,000㎡： 50,000㎡～100,000㎡

5/11

3. Supply trends by type of development site
In Tokyo’s three central wards, supply through rebuilding will remain at a high level in 2015-18,
accounting for approximately 80% of the total supply. The inventory of office space is being
significantly renewed not only in the Otemachi/Marunouchi district, but also in the
Yaesu/Nihonbashi/Kyobashi district. The supply primarily through rebuilding is expected toremain a central factor. Aside from rebuilding, supply on publicly owned land is expected torecover, while supply through redevelopment will also increase. At the same time, supply using
other undeveloped/underdeveloped land (“Other”), including idle land, is expected to decrease.
(See Chart 3-1.a.)Outside of Tokyo’s three central wards, supply on undeveloped/underdeveloped land willaccount for approximately 70% of the total supply in 2015-18 as well, while supply throughrebuilding will remain low, at approximately 30%. To date, supply on “Other” has accounted forthe largest share of total supply; moving forward, supply through redevelopment will exceed
supply on “Other” and supply through rebuilding. Supply through the development of publicly
owned land, a significant factor in 2011-14, is expected to be nil in 2015-18. (See Chart 3-1.b.)【Chart3-1】Supply volume and ratio by land for development［b.Other wards ］［a. Tokyo’s three central wards ］(10,000㎡)(10,000㎡)

350

350

300
50
（18％）

250

59
（25％）

200

150
178
（75％）

100

300

Supply volume

Supply volume

250

66
（22％）

230
（82％）

233
（78％）

200

150

147
（79％）

100

71
（68％）

94
（80％）

50

50

0

0

2007−20102011−2014

2015−2018

24
（20％）

2007−20102011−2014

38
（21％）

33
（32％）

2015−2018

Undeveloped/underdeveloped land : Other
Undeveloped/underdeveloped land : Redevelopment
Undeveloped/underdeveloped land : Public
Rebuilding【Deﬁnition】
Rebuilding :Land (or the development of such land) previously used as one site, occupied by a building for office, hotel, or residence which has been demolished.
Undeveloped/underdeveloped land :Land (or the development of such land) not used effectively; for instance, mixed zones of parking lots and older buildings, densely populated residential
areas, former plant sites, railway sites, or idle land.

6/11

4. Supply trends for mid-size office buildings in Tokyo’s 23 wards
This section discusses supply trends for mid-size buildings with office space of 5,000
square meters to less than 10,000 square meters.
The supply of office space in mid-size office buildings in 2014 amounted to 112,000
square meters, which is less than the average of the past 10 years. Supply in 2015-16 isalso expected to be substantially less than the past average. (See Chart 4-1.)
In terms of supply areas, as with large-scale buildings, there is an ongoing trend toward
concentration in central Tokyo. In 2015-16, supply in Tokyo’s three central wards is
expected to account for over 70% of the total supply. By ward, Minato Ward will hold thehighest share of supply, accounting for approximately 40%, while Chuo Ward, which had
accounted for over 30%, will see its share decline to 10%. The substantial increase insupply in Minato Ward is especially noticeable at the Toranomon/Shinbashi district, where
functional upgrades intended to make the district an international business center are
accelerating, including further development of Loop Line No. 2, multiple ultra large-scale
development projects, and plans for a new subway station. These factors also underpin
the development of mid-size office buildings in that district. (See Chart 4-2 on the next
page.)In terms of supply by type of development site, in 2015-16, supply through rebuilding
will account for approximately 70% of the total supply in Tokyo’s three central wards.
Outside the three central wards, supply on undeveloped/underdeveloped land is projectedto account for over 70%. (See Chart 4-3 on the next page.)In recent years, mid-size office buildings supplied by major developers have accounted
for an increasing percentage of the total supply. Beyond buildings intended for use ascorporate head offices, which had predominated in the past, more buildings are being
developed for lease as office space and for real estate funds. (See Chart 4-4 on the next
page.)【Chart4-1】Supply trends for mid-size office buildings in Tokyo’s 23 wards
Office supply in completed buildings
Office supply in buildings under construction

30

27
20

23

14

22

22
19

16

13
(10,000㎡)
20.0

8
19.5

Supply volume

15.0

14.1

14

.0

0

15.5

15.4 15.3
13.1

11.2

5.0

10

13

1995-2014 average supply:
128,000㎡/year

9.4 9.2

10.0

20

Number of supply

Office supply in buildings to be constructed
Number of supply

9.3

10.5

4.9

'05 '06 '07 '08 '09 '10 '11'12 '13

'14

'15

'16

7/11

【Chart4-2】Supply of mid-size buildings: Ratio by ward and top three districts［2011−2012］
Other wards
17%［2015−2016］

Shibuya6%

Other wards
14%

Shinagawa2%
Shibuya3%
Shinjuku
2%

Chiyoda17%

Shinagawa7%

Shinjuku
4%［2013−2014］
Other wards
18%

Chuo
30%

Chiyoda24%

Shibuya7%
Minato26%

Minato
19%

Koto
7%

Chiyoda
14%

Chuo
35%

Minato
38%

Chuo
10%

Tokyo’s three central wards :187,000㎡（66%）

Tokyo’s three central wards :199,000㎡（75%）

Tokyo’s three central wards :143,000㎡（72%）

Other wards :97,000㎡(34%)

Other wards :68,000㎡(25%)

Other wards :55,000㎡(28%)

Top three districts

SupplySupplyTop three districts

SupplyYaesu・Nihonbashi・Kyobashi 34,000㎡

Yaesu・Nihonbashi・Kyobashi 33,000㎡

Toranomon・Shinbashi

62,000㎡

Jinbocho・Ogawamachi

33,000㎡

Toranomon・Shinbashi

25,000㎡

Iwamotocho・Higashikanda

16,000㎡

Toranomon・Shinbashi

20,000㎡

Kayabacho・Hatchobori

21,000㎡

Uchikanda・Kandasudacho

15,000㎡

Top three districts【Chart4-3】Supply of mid-size buildings: Ratio by type of development site (2015-16)［Three central wards］
Undeveloped or
Underdeveloped land
33%

［Other wards］
Undeveloped or
Underdeveloped land
75%
Rebuilding
25%

Rebuilding
67%【Chart4-4】Supply of mid-size buildings: Ratio developed by major developers*［2005−2008］［2009−2012］

Major developers
12%・45,000㎡

Others
88%・332,000㎡［2013−2016］
Major developers
28%・175,000㎡

Others72%・458,000㎡

Major developers
27%・125,000㎡

Others73%・339,000㎡* Major developer: the developer capitalized at ten billion yen or more

8/11

5.Conclusion
Conditions in Tokyo’s office space market continue to improve due to demand recovery byrecovering growth in corporate earnings and falling office building supply. The upward trend in
rent levels, which had already begun to reflect these changes, has further solidified.
Supply from 2015 on will include certain years in which supply exceeds the past average, butwill center on supply through rebuilding in Tokyo’s three central wards. This means the increasein stock will remain gradual. Most recently, office building supply was at an extremely high level in2012, but, in spite of that, stock in 2013 declined at a rate close to 2% in Chiyoda Ward anddeclined in the three central wards as a whole. (See Charts 5-1 & 5-2 on the next page.) With
the current structure of supply concentrated in rebuilding projects, supply at a rate of around
1,000,000 square meters per year will have negligible impact on the supply-demand relationship.
Going forward, in 2017, when supply will decline sharply, the supply-demand balance will
become extremely tight, a trend that is likely to further improve market conditions.
At the time of the previous survey, supply in 2017 was projected to be 1,170,000 square
meters, which would have exceeded the past average. Nevertheless, the results of this survey
put the figure at 570,000 square meters, around half the previous estimate. Construction costs
rising over the past few years and supply being concentrated in large-scale developments which
require time for government deliberations and procedures seem to affect construction start dates
and timetables. While the rise in construction costs is said to have abated somewhat lately, costs
remain high and will continue be a factor that suppresses supply for the time being. (See Chart
5-3 on the next page.)
At the same time, on the demand side, the ratio of job openings to job seekers has been atpeak levels since the previous year, and vacancy rates are clearly declining, reflecting rampant
demand for office expansion in the private sector. (See Chart 5-4 on the 11th page.)
Given these market conditions, downward pressures on supply generated by rising
construction costs and other factors will temporarily help maintain favorable conditions in theoffice space market. At the same time, these factors will inevitably affect the market’s medium
and long-term development and efforts to strengthen Tokyo’s international appeal. Given thepositive impact of Abenomics and firm market conditions, now is the time to address continuing
high construction costs and shorten the time required for government deliberations andprocedures for large-scale development projects. Public and private sectors should work together
to take timely measures to address these issues and further upgrade the city’s urban functions.

9/11

【Chart 5-1】Office stock in Tokyo’s three central wards

Minato Ward
Chuo Ward
Chiyoda Ward

(10,000㎡)
5,000

3,852

4,000

Office space

4,095

4,592

4,525

3,294
3,000

2,782

2,000
1,000
0

'89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13
Source: Compiled by Mori Trust based on “An Overview of Tokyo’s Land” (Tokyo Metropolitan Government)【Chart 5-2】Growth of oﬃce stockThree central wards
Minato Ward
Chuo Ward
Chiyoda Ward（％）
12

Growth rate

10
8
6
4
2
0
-2

'89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13
Source: Compiled by Mori Trust based on “An Overview of Tokyo’s Land” (Tokyo Metropolitan Government)【Chart 5-3】Price of Construction Materials and Wages Index*(for Tokyo ; 2005 is set to 100)
120.0
118.0
116.0
114.0

Index

112.0
110.0
Hotel

108.0

RC structure

Apartment SRC structure

106.0

Oﬃce

SRC structure

104.0
102.0
100.0
98.0
96.0
10.9 10.12 11.3

11.6

11.9 11.12 12.3

12.6

12.9 12.12 13.3

13.6

13.9 13.12 14.3

14.6

14.9 14.12 15.3(P)Source: Compiled by Mori Trust based on “Price of Construction Materials and Wages Index Monthly” (Construction Research Institute)*Changes in price (index) are calculated per item (per item of materials, etc.). Thus, a construction company’s margin is not included.

10/11

Vacancy rates

（％）
10.00

（x）
2.00

9.00

1.80

8.00

1.60

7.00

1.40

6.00

1.20

5.00

1.00

4.00

0.80

3.00

0.60

2.00

0.40

1.00

0.20

0.00

'04

'05

'06

'07

'08

'09

'10

'11

'12

'13

'14

Ratio of job openings to job seekers【Chart 5-4】Vacancy rates and the ratio of job openings to job seekers(Tokyo)

Left axis :Vacancy rates(five central wards)*As of December
Right axis :Ratio of job openings to job seekers*Annual average for Tokyo

0.00

Source: Compiled by Mori Trust based on “Office Data” (Miki Shoji Co., Ltd.) and data of Ministry of Health, Labor and Welfare

11/11