Survey of Large-scale Office Building Supply
in Tokyo’s 23 wards 2014

June 3,2014

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-scale 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 2013]

The supply is expected to remain near past averages
Main Results of This Survey
１.Supply of large-scale office buildings

In 2013, Tokyo’s 23 wards saw the supply fall to 660,000 square meters, a significant
decline from the average for the past 20 years.The supply in 2014 is expected to be
930,000 square meters, approximately 15% lower than the past average. Annual
projections for 2015-17 are at least one million square meters, similar to the past
average.

２.Supply trends by area

Supply in central Tokyo is expected to further increase during the 2014-17 timeframe:
Some 70% of this space will be located in Tokyo’s three central wards. Some 30% of
the overall supply is expected to be located in Chiyoda Ward, a consistent leader,followed by Minato Ward, whose share is projected to rise dramatically to more than
20%. Three districts in Minato Ward (Toranomon and Shinbashi; Konan; and Shibakoen
and Hamamatsucho) are expected to rise into the list of top ten and take their place.

３.Supply trends by land for development

In 2014-17, in Tokyo’s three central wards, some 70% of office space will be supplied
through rebuilding, a high percentage continuously maintained. More and more officespace is being rebuilt on such land not just in Otemachi and Marunouchi, but in Yaesu,
Nihonbashi, and Kyobashi. This trend is likely to continue into the future. In contrast,
during the same period, in other wards, some 80% of the office space will be suppliedby using undeveloped or underdeveloped land; supply through rebuilding willaccount for just 20% of the overall figure.

４.Supply of mid-scale office buildings

The year 2013 saw the supply reach 155,000 square meters, significantly above thepast ten-year average. The supply in 2014, however, is expected to fall to 115,000
square meters, and to fall still further to levels below past averages by 2015. In
2014-15, some 80% of this supply will be introduced in Tokyo’s three central
wards.Minato Ward, the largest supplier, is expected to account for slightly more than
30%, followed by Chuo Ward and Chiyoda Ward, each accounting for some 20%. Major
developers have accounted for a growing share of mid-scale office buildings over the
past several 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 2013, Tokyo’s 23 wards saw the supply of large-scale office space fall to 660,000 square
meters, a significant decline from the average for the past 20 years (1.1 million square meters peryear) partly explained by the completion of many large-scale development projects in 2012,
particularly rebuilding projects in Otemachi and Marunouchi. In any case, the supply amount was
the third lowest during the past 20 years. (Chart 1-1)
The supply in 2014 is expected to be 930,000 square meters, approximately 15% lower than thepast average. Annual projections for 2015-17 are at least one million square meters, similar to thepast average. (Chart 1-1)
From 2014 in Tokyo’s three central wards, the supply is expected to be approximately 20% above
the past average. For Tokyo’s other wards, this figure is expected to fall short of the past average.
(Chart 1-2)
As for the supply trends by scale in 2014-17, the supply of large-scale buildings of over 50,000
square meters is expected to increase drastically, accounting for some 80% of the total supply. This
would approach record percentages for such space. (Chart 1-3)
The future supply will remain at the past average level and will mostly come from highly
demanded, very large buildings in the three central Tokyo wards. Thus we may see thesupply-demand balance improve slowly but steadily over the next several years.

2 . Supply trends by area
Supply in central Tokyo is expected to further increase during the 2014-17 timeframe: Some 70%of this space will be located in Tokyo’s three central wards. Some 30% of the overall supply is
expected to be located in Chiyoda Ward, a consistent leader, followed by Minato Ward, whose
share is projected to rise dramatically to more than 20%. Additionally, the share held by Shinagawa
Ward is expected to rise to 10%, while those of Shinjuku Ward, Shibuya Ward, and Koto Ward will
be below 10% .(Chart 2-1)
Business districts in Tokyo’s three central wards will be among the leading areas in which newspace is introduced. These include Otemachi and Marunouchi; Yaesu, Nihonbashi, and Kyobashi;
Akasaka and Roppongi; and Toranomon and Shinbashi. Districts other than the three central wards
currently ranking among the top ten business districts in 2010-13 (Nishi-Shinjuku, Nakano, andRinkai) are expected to drop out of the top ten in 2014-17. Three districts in Minato Ward
(Toranomon and Shinbashi; Konan; and Shibakoen and Hamamatsucho) are expected to rise into
the list of top ten and take their place. (Chart 2-2)

2/11

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

50

43

40

36

33

29

29

22

23

(10,000㎡)

17

250

26

29

29

30

25

20

21

20

16

14

27

27

32

20

19

16

14

10

221
200

0

1994-2013 average supply:
1,100,000㎡/year

183

Number of supply

49

183

Supply volume

162
150
119
100

118
99

92

89

74

0

121
106

90

82

72

50

126

119

118

117

93

82
66

64

36

'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11'12 '13 '14 '15 '16 '17【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'94－'9856%(630,000㎡/year)

44%(500,000㎡/year)

1994-2013 average supply:
640,000㎡/year

1994-2013 average supply:
460,000㎡/year'99－'0357%(610,000㎡/year)43%(460,000㎡/year)'04－'0858%(630,000㎡/year)42%(460,000㎡/year)'09－'1362%(680,000㎡/year)

38%(420,000㎡/year)(10,000㎡)
100

76

79

(10,000㎡)
100

75

74
64

50

42

50

43
31

0%

17
0

'14 '15 '16'17

0'14－'1778%(860,000㎡/year)
20%

40%

Buildings of 50,000㎡ or larger'14 '15 '16

60%

22%
(240,000㎡/year)
80%

100%

Buildings of less than 50,000㎡

'17

3/11

【Chart 2-1】Supply of large-scale office space by ward
［2010−2013］［2014－2017］

Tokyo’s three central wards :2,420,000㎡（53%）

Tokyo’s three central wards :3,040,000㎡（70%）

Other wards :2,150,000㎡（47%）

Other wards :1,330,000㎡（30%）
Supply(10,000㎡）

Other wards
13%

Koto
14%

Chiyoda30%

Shinagawa7%
Shibuya4%
Shinjuku
10%

Chuo
11%
Minato11%

Chiyoda

138

Chuo

52

Minato52

Shinjuku

45

Shibuya19

Shinagawa

30

Koto
OthersKoto
8%

Other wards
4%

Supply(10,000㎡）

Shinagawa
10%
Chiyoda32%

Shibuya4%
Shinjuku
5%

Chiyoda

140

Chuo

59

Minato105

Shinjuku

21

Shibuya19

Shinagawa

42

65

Koto

33

56

Others18

Minato
24%

Chuo
13%

【Chart 2-2】Top ten districts［2010－2013］（10,000㎡）
78
70
（17％）

2010
2011
2012
2013

Supply volume

60
50
40

26
（6％）

26
（6％）

26
（6％）

NishiOtemachi
marunouchi Shinjuku
Yurakucho

Osaki
GotandaToyosu

30

25
（5％）

24
（5％）

24
（5％）

20
（4％）

Akasaka
Roppongi

Nakano

17
（4％）

16
（4％）

RinkaiShinjuku

20
10
0（10,000㎡）
60

Yaesu
Jinbocho
Ogawamachi Nihonbashi
Kyobashi［2014－2017］

2014
2015
2016
2017

Supply volume

50
40

93
（21％）
42
（10％）

34
（8％）

33
（8％）

31
（7％）

23
（5％）

22
（5％）

Yaesu
OtemachiMarunouchi Nihonbashi
Yurakucho Kyobashi

Akasaka
Roppongi

Osaki
GotandaToyosuToranomon
Shinbashi

Konan

3（7）

4（3）

5（4）

6（−）

30

19
（4％）

18
（4％）

12
（3％）

20
10
0

Rank

（ ）for previous
timeframe

1（1）

2（6）

7（−）

Shibakoen Kojimachi Ichigaya
Hamamatsu- Hirakawachocho
Kioicho
8（−）

9（−）

10（−）

4/11

【Chart 2-3】Supply volume in the key business districts［2010−2013］

Oshiage

NakanoNishi-Shinjuku

Chiyoda Ward

Shinjuku

Jinbocho
Ogawamachi
Kojimachi
Muromachi
Hirakawacho
HonchoKioicho Otemachi
Marunouchi
Yurakucho
Yaesu
Nihonbashi
Uchisaiwaicho
KyobashiKasumigaseki
Nagatacho

Yoyogi

Chuo Ward

JinnanUdagawacho
Dogenzaka

Akasaka
Roppongi

Ginza

Toyocho

Toranomon
ShinbashiToyosuShibuya

Tsukishima
Kachidoki
Harumi

Minato Ward

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

MeguroKamiosaki

Konan

Osaki
GotandaRinkai：100,000㎡～200,000㎡： 50,000㎡～100,000㎡［2014−2017］

Okubo

Iidabashi
Kudan
Fujimi

IchigayaKojimachi
Hirakawacho
Kioicho Otemachi
Marunouchi
Yurakucho

Sendagaya
Jingumae

Jinbocho
Ogawamachi
Muromachi
HonchoYaesu
Nihonbashi
KyobashiChiyoda Ward

Chuo Ward

Akasaka
Roppongi

Ginza
Toranomon
ShinbashiToyosuShibakoen
Hamamatsucho

Minato Ward

Approx.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 land for development
In 2014-17, in Tokyo’s three central wards, some 70% of office space will be supplied throughrebuilding, a high percentage continuously maintained. More and more office space is being
rebuilt on such land not just in Otemachi and Marunouchi, but in Yaesu, Nihonbashi, andKyobashi. This trend is likely to continue into the future. Additionally, supply space will be
drastically increased by redevelopment, while undeveloped or underdeveloped land including idle
land is expected to supply less space for offices. (Chart 3-1.a.)
In contrast, during the same period, in other wards, some 80% of the office space will be
supplied by using undeveloped or underdeveloped land; supply through rebuilding will accountfor just 20% of the overall figure. Of the undeveloped and underdeveloped land, the category“Other, ” including idle land, is the largest supplier of office space. As for other categories included
in undeveloped or underdeveloped land, “Redevelopement” supply tends to increase. In contrast,
the development of publicly owned undeveloped/underdeveloped land (“Public”), which
increased in 2010-13, is projected to disappear entirely in the 2014-17 timeframe. (Chart 3-1.b.)【Chart3-1】Supply volume and ratio by land for development［a. Tokyo’s three central wards ］

300

Supply volume

87
（29％）

103
（33％）

250

38
（16％）

200

150
209
（67％）

100

204
（84％）

50

0

(10,000㎡)
350［b.Other wards ］

300

250

Supply volume(10,000㎡)
350

217
（71％）

200
168
（78％）

150

100

103
（77％）

111
（90％）

50

2006−20092010－20132014－2017

0

12
（10％）

2006－20092010－2013

47
（22％）

30
（23％）

2014－2017

Undeveloped or underdeveloped land : Other
Undeveloped or underdeveloped land : Redevelopment
Undeveloped or 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 or 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-scale office buildings in Tokyo’s 23 wards
Discussed here are supply trends for mid-scale office buildings (from 5,000 to 10,000
square meters of office space ).
The year 2013 saw the supply of mid-scale office space reach 155,000 square meters,
significantly above the past ten-year average. The supply in 2014, however, is expected
to fall to 115,000 square meters, and to fall still further to levels below past averages by
2015. (Chart 4-1)
As for large-scale buildings, most mid-scale office buildings are emerging in central
Tokyo. In 2014-15, some 80% of this supply will be introduced in Tokyo’s three central
wards. Of the 23 wards, Minato Ward, the largest supplier, is expected to account forslightly more than 30%, followed by Chuo Ward and Chiyoda Ward, each accounting forsome 20%. Minato Ward’s share has significantly increased for the past several years,
driven by steady growth in office building construction in Toranomon and Shinbashi, acore district. (Chart 4-2)
In 2014-15, in Tokyo’s three central wards, some 80% of office sites will be preparedthrough rebuilding. In the other wards, more than 60% will be prepared through thedevelopment of undeveloped/underdeveloped land. (Chart 4-3) In 2012, the Tokyo
Metropolitan Government made seismic diagnosis mandatory for certain specified
roadside buildings and established subsidization schemes for such a reason. In the future,
this scheme may facilitate the renovation of older small and mid-scale buildings. Major
developers have accounted for a growing share of mid-scale office buildings over the past
several years. (Chart 4-4)

30

27
20
14
14

17

14.1

5.0

10.0

10
0

1994-2013 average supply: 19.5
126,000㎡/year

15.5

15.4 15.3
13.1

11.5
10.0

20
15

13

15.0

Supply volume

19

8(10,000㎡)
20.0

23

22

22

9.4 9.2

Number of supply【Chart4-1】Supply trends for mid-scale office buildings in Tokyo’s 23 wards

10.4

4.9

Office supply in completed buildings
Office supply in buildings under construction.0

Office supply in buildings to be constructed
Number of supply'04 '05 '06 '07 '08 '09 '10 '11'12 '13 '14 '15

7/11

【Chart4-2】Supply of mid-scale buildings: Ratio by ward and top three districts［2010−2011］［2012−2013］
Other wards
19%

Other wards
23%
Chiyoda
20%

Koto
2%
Shinagawa4%
Shibuya6%

Chiyoda17%

Shinagawa4%
Shinjuku
4%

Chuo
28%

Shinjuku
4%［2014−2015］
Koto
3%
Shibuya10%

Minato13%

Shinjuku
3%

Chiyoda
22%

Chuo
34%

Minato22%

Other wards
6%

Minato
32%

Chuo
24%

Tokyo’s three central wards :187,000㎡（61%）

Tokyo’s three central wards :208,000㎡（73%）

Tokyo’s three central wards :171,000㎡（78%）

Other wards :120,000㎡（39%）

Other wards :78,000㎡（27%）

Other wards :48,000㎡（22%）

Top three districts

SupplySupplyTop three districts

SupplyYaesu・Nihonbashi・Kyobashi 37,000㎡

Yaesu・Nihonbashi・Kyobashi 28,000㎡

Top three districts

Toranomon・Shinbashi

31,000㎡

Jinbocho・Ogawamachi

35,000㎡

Toranomon・Shinbashi

26,000㎡

Yaesu・Nihonbashi・Kyobashi 20,000㎡

Toranomon・Shinbashi

30,000㎡

Iwamotocho・Higashi-Kanda

23,000㎡

Shiba・Mita

19,000㎡【Chart4-3】Supply of mid-scale buildings: Ratio by type of development site (2014-15)［Three central wards］
Undeveloped or
Underdeveloped land
20%

［Other wards］
Undeveloped or
Underdeveloped land
61%

Rebuilding
39%
Rebuilding
80%【Chart4-4】Supply of mid-scale buildings: Ratio developed by major developers*［2004−2007］［2008－2011］

Major developers
15%・51,000㎡

Others
85%・285,000㎡［2012－2015］

Major developers
24%・152,000㎡

Others
76%・491,000㎡

Major developers
28%・143,000㎡

Others72%・362,000㎡* Major developer: the depeloper capitalized at ten billion yen or more

8/11

5.Conclusion
The rental office market in Tokyo showed clear signs of recovery. In 2013, as the supply
contracted dramatically, demand for office space was on track for recovery. Abenomics, a weakyen, and the decision to award Tokyo the 2020 Olympics helped strengthen business confidence
and improve the supply-demand balance, resulting in rents beginning to increase, which had
trended downwards for years.
The supplies in 2014 and onward are expected to remain near past averages, mainly throughrebuilding in Tokyo’s three central wards. This development will result in slight growth in the officestock. (Charts 5-1 & 5-2) Further, the ratio of job openings to job seekers(Tokyo) has risen toa level comparable to that of 2006, the highest in recent years, a sign of growing demand. We
project the supply-demand balance will continue to tighten. (Chart 5-3) A look at office spaceleasing for buildings completed in 2014 shows many have achieved high initial occupancies—
more than 80% of such office space was occupied at the time of completion. Demand remains
strong for well located, well-equipped, up-to-date office buildings.
Given the clear economic recovery in many industries, demand for office space is expected tocontinue rising, and measures have to be taken to meet such demand. However, soaring
construction costs over the past two years has raised serious concerns. (Chart 5-4) This trend
may curb supply, thereby interfering with the smooth pace of rebuilding and improvements tourban functions. If such improvements stagnate, this may impair efforts to create a global
business city and hamper plans for the National Strategic Special Zones currently being
developed by public and private sectors to make Japan more competitive worldwide.
The rise of construction costs is partly due to a weak yen, which has made building materials
more expensive. But the biggest problem remains the shortage of skilled workers. That problem
is most probably exacerbated by construction demand generated by rehabilitation associatedwith post Earthquake efforts and from efforts to build infrastructure for the 2020 Olympic Games.
The goal is to make Tokyo a more attractive global city by 2020. This will require continued
development. Addressing the shortage of skilled labor through dramatic and timely measures on
the part of the Government is greatly anticipated.

9/11

【Chart 5-1】Office stock in Tokyo’s three central wards
Minato Ward
Chuo Ward(10,000㎡)

Chiyoda Ward

5,000

Office space

4,000
3,000

3,798

4,606

4,459

3,982

3,195
2,641

2,000
1,000
0

'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: 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

'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: Compiled by Mori Trust based on “An Overview of Tokyo’s Land” (Tokyo Metropolitan Government)

（％）

（x）

10.00

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

Vacancy rates【Chart 5-3】Vacancy rates and the ratio of job openings to job seekers(Tokyo)

Left axis :Vacancy rates(five central wards)*As of December ;and as of March for '14
Right axis :Ratio of job openings to job seekers*Annual average for Tokyo ;and as of March for '14

0.00

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

10/11

【Chart 5-4】Price of Construction Materials and Wages Index*(for Tokyo ; 2005 is set to 100)
114.0
112.0
110.0
108.0
Hotel

Index

106.0

RC structure

Apartment SRC structure
104.0

Oﬃce

SRC structure

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

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.

11/11