Survey of Large Office Building Supply
in the 23 wards of Tokyo '09

April 9, 2009

We, Mori Trust Co., Ltd. (Head Office: Minato-ku, Tokyo), have since 1986 undertaken continuous field surveys and interviews
concerning the implementation of plans for large-scale office building projects (total office floor area: 10,000 square meters ormore) within the 23 wards of Tokyo. Results of the most recent surveys and analysis are presented below. In the calculation of
total office floor area, where the survey deals with multi-purpose buildings—buildings coupled with stores, living quarters or[Survey Date: December 2008]
residences, hotels, etc.—only the floor area purely for office use is taken into consideration.

Focus of supply area shifting from central Tokyo to neighboring areas
Main Results of This Survey

1. Changes in Supply Volume:
Supply is expected to remain low until 2010, at less than 1 million square meters in each of the threeconsecutive years starting from 2008, but to rebound to 1.5 million square meters or so in the years
2011-2012.
1.00.80.6
0.4
0.20.0For the years 2009-2010, total annual supply is projected to reach only 800,000 square meters, withlow supply (defined as figures below recent averages: 1.04 million square meters/year) persisting
until 2010. In contrast, supply is expected to rebound to roughly 1.5 million square meters in
2011-2012; however, current market conditions are likely to lead to the postponement orcancellation of several projects, leading to probable declines in supply, depending on future trends.

2. Trends in Supply Location:
Supply is trending downward in central Tokyo but appears likely to increase in neighboring areas.
A look at supply locations in the years 2009-2012 shows that the share of total supply accounted
for by the three central wards of Tokyo may decline to less than one-half of total supply, while thevolume of supply itself falls to roughly 70% of actual levels in the years 2005-2008. A look at sharesfor individual wards shows that while Chiyoda Ward will continue to account for over 30% of total
supply, Minato Ward’s share will fall to roughly 10% – less than the share accounted for by Koto Ward.
A look at supply by business area shows that while the Otemachi-Marunouchi-Yurakucho area
features abundant supply, areas with the next highest levels of supply lie outside the three centralwards, including the Rinkai, Toyosu, and Osaki/Gotanda areas, indicating a clear trend toward supply
dispersed over locations neighboring the center.
3. Trends by Development Site:
Supply in the three central wards has focused on rebuilding, while other areas tend to feature
thriving new, large-scale developments on unused land.
A look at supply trends by development site in the years 2009-2012 shows that the supply
structure will likely focus even more on rebuilding in the three central wards of Tokyo. While therenewal of office stock emerging from rebuilding has remained fairly consistent, development ofunused or underutilized sites such as former Japan National Railway land has declined significantly.
Outside the three central wards of Tokyo, development of unused or underutilized sites continues toaccount for over 80% of new supply, with large-scale developments of unused land thriving in theRinkai area and elsewhere.

For further information, please contact:
Research & Planning
Teppei Tokura
Building Leasing Department1
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: tokura-t@mori-trust.co.jp

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Future Market Outlook
A look back at supply trends of large-scale office buildings since 2000 shows a clear
focus on central Tokyo, with supply in the three central wards uniformly exceeding thatin other areas since 2000. However, these areas are expected to trade places once again
from 2010.
A look at the relation between supply trends and land price changes shows that supply
in the three central wards of Tokyo, which had thrived since 2000, had been boosted by
the tailwind of falling land prices persisting for some time following the collapse ofJapan’s real-estate bubble. However, since 2006, when land prices began to rebound,supply in these areas has slowed. In contrast, in areas outside the three central wards,
where land prices are moderate compared to central Tokyo, while the rebound in land
prices temporarily dampened supply, supply is expected to surpass that in the threecentral wards from 2010.
While this supply outside central Tokyo will capture demand from firms seeking to cut
office costs during times like the current downturn, demand remains steady for officebuildings with prime locations in central Tokyo. As such, there are no signs of majorchanges in the movement of corporations back to central Tokyo. The real-estate market
currently is in a readjustment phase; prices in central Tokyo, which had been rising,have now peaked and begun to fall. This price adjustment is expected to create a
supply of properties meeting corporate demand in terms of both location and lease
rates, stimulating latent office demand and revitalizing the market.
The current slowdown in the office and real-estate markets may even represent an
opportunity to promote redevelopment of urban functions suited to the characteristics
of locations, and from a long-term perspective it is hoped that such slowdown will leadto appropriate urban environment development.

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Figure 1: Trends in supply volume of large-scale office buildings in the 23 wards of Tokyo

Key
Completed supply
Incomplete supply under construction
Incomplete supply not yet under construction
Supply quantity

4140

33

(Buildings)

4950434736

33

37

24

29

29

22

23
17（10,000 ㎡）
250
12

27

27

40
30

30

26

20

21

20

1614

33

16

221

Supply volume

200

162
147

150

100

56

0

108 104

119114 118

118
99

92

83

50

Supply volume (own buildings)01986 - 2008 average supply:
1,040,000 ㎡ / year

183

100

85

82

72

152

119

118

89

74

87

63

55
36

'86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12

61

60
40
20

10

Supply quantity

46

32
15

8

17

12

27

38
25

11

13

23

22

11

1921

38

32
9179137671960

Figure 2: Trends in average total office floor area per building (five-year intervals)

26,000㎡ / building(1988-1992)

43,000㎡ / building

45,000㎡ / building

42,000㎡ / building(1998-2002)(2003-2007)(2008-2012)

32,000㎡ / building(1993-1997)

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Figure 3: Large-Scale Office Supply by Ward〔2009-2012〕〔2005-2008〕
Three central wards :3170,000㎡(75%)
Other areas:1090,000㎡(25%)

Koto ward
Shinagawaward
Shibuyaward
2%

Shinjuku
ward
0.5%

Supply volume

Other 16 wards
4%

Chiyoda ward

11%
8%

Chiyoda ward
31%

Minato ward
37%

Three central wards :2250,000㎡(48%)
Other areas:2460,000㎡(52%)

7%

Chuo ward

Supply volume

Other 16 wards

1300,000 ㎡

Chuo ward

310,000 ㎡

Minato ward

1560,000 ㎡

Shinjuku ward

20,000 ㎡

Shibuya ward

70,000 ㎡

Shinagawa ward

340,000 ㎡

Koto ward

470,000 ㎡

Other 16 wards

190,000 ㎡

Chiyoda ward

11%
Koto ward
20%

Chiyoda ward
33%
5%

8%
Shinagawaward

4% 10%

Shibuya Shinjuku
ward
ward

10%
Chuo ward
Minato ward

1300,000 ㎡

Chuo ward

310,000 ㎡

Minato ward

1560,000 ㎡

Shinjuku ward

20,000 ㎡

Shibuya ward

70,000 ㎡

Shinagawa ward

340,000 ㎡

Koto ward

470,000 ㎡

Other 16 wards

190,000 ㎡

Figure 4: Trends in the top 10 districts in terms of large-scale office supply volume

Supply volume(10,000 ㎡)
50〔2005-2008〕

Key20052006

402007
2008

30
20
100Otemachi
Marunouchi
Yurakucho

Akasaka

Roppongi

Osaki
GotandaToyosuAkihabara〔2009-2012〕(10,000 ㎡)
50

Supply volume

Shiodome

Yaesu
Nihonbashi
Muromachi

Konan

Rinkai

Key20092010

402011
2012

30
20
100Otemachi
Marunouchi
Yurakucho

RinkaiToyosuOsaki
GotandaNishi-Shinjuku

NakanoBanchoKojimachi
Hirakawacho

Shinjyuku Uchisaiwaicho Jinbocyo
kasumigaseki ogawamachi
nagatacyo

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Figure 5: Large-scale office supply volume in the individual key business districts〔2005-2008〕

Akihabara

Kinshicho

Jinbocho・
Ogawamachi

Iidabashi・
kudan

Chiyoda ward

Otemachi・Marunouchi・
Yurakucho
750,000㎡

Uchisaiwaicho・
Kasumigaseki・
Nagatacyo
AkasakaNihonbashi・
Kyobashi・Muromachi
Cyuo ward

AoyamaRoppongi

Toranomon ShiodomeToyosu

Minato ward

Tukishima・
Kachidoki・HarumiShiba・Mita

Shirogane
Approx. supply volume

Shinkiba：400,000 ㎡ ～：200,000 ㎡～ 400,000 ㎡：100,000 ㎡～ 200,000 ㎡： 10,000 ㎡～ 100,000 ㎡

Konan
RinkaiOsaki
Gotanda〔2009-2012〕
Oshiage
NakanoNishi-Shinjuku

Chiyoda ward

Shinjuku

Bancyo・Koujimachi・
Hirakawacho
Uchisaiwaicho・
Kasumigaseki・
Nagatacyo

Jinbocho・
Ogawamachi

Otemachi・Marunouchi・
Yurakucho
980,000㎡

AkasakaNihonbashi・
Kyobashi・Muromachi

Roppongi

Shibuya
Udagawacho・Dougenzaka・
Nanpeidaicho

Toyocho・
Kiba

Cyuo ward

ToyosuMinato wardShiba・MitaApprox. supply volume

Tukishima・Kachidoki・Harumi

Shibaura：400,000 ㎡ ～：200,000 ㎡～ 400,000 ㎡：100,000 ㎡～ 200,000 ㎡： 10,000 ㎡～ 100,000 ㎡

Konan
Osaki
GotandaRinkai5/7

Figure 6: Percentages of large-scale office supply volume by site type

〔Three central wards〕(10,000 ㎡)
350〔Other districts〕(10,000 ㎡)
350

300

300

1320,000㎡
（42％）

250

390,000㎡
（17％）

200

150

1850,000㎡
（58％）

100

1860,000㎡（83％）

Supply volume

Supply volume

250

200

10050

50

00

2005－20082009－2012

2090,000㎡（85％）

1501020,000㎡（93％）

370,000㎡（15％）

70,000㎡（7％）

2005－20082009－2012
Key

Development of unused orunderutilized land (public land)
Development of unused orunderutilized land (other land)
Rebuilding
凡例[Terminology]
Rebuilding:Land after demolition, previously occupied by a building used as an office, hotel, residence, etc.
(or development thereof).
Unused or underutilized land:
Land not previously put to effective use, including land dotted with undeveloped plots like parking lots anddecrepit buildings, densely developed residential areas, former factory sites, railroad land, or unused land(or development thereof).

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Figure 7: Trends in large-scale office supply and land prices in the three central wards of Tokyoand other areas

KeyYear-on-year rate of change in commercial land prices in Tokyo’s 23 wards
Supply in the three central wards of Tokyo
Supply in other areas(10,000 ㎡)
200

40％

0％

▲40％

150

Supply volume80％

100

500'86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12

Source: The above data was prepared by Mori Trust Co., Ltd. based on official land prices
released by the Ministry of Land, Infrastructure and Transport of Japan.

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