Survey of Large Office Building Supply
in the 23 wards of Tokyo '07

April 4, 2007

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 floor area: ten thousand square meters)
within the 23 wards of Tokyo. Results of the most recent surveys and analysis are presented below. Where the survey considers
multi-purpose buildings—buildings coupled with stores, residences, hotels, etc.—only the area purely for office use is[Survey Date: December 2006]
assessed.

Extremely Low Supply of Large-scale Office Buildings Until 2010
Main Results of This Survey

㪈㪅㩷Trends in Supply Volume:
Average annual supply for 2007–2010 of 760,000 square meters, half the 2003–2006 level of 1.46
million square meters
Since the supply boom of 2003, as a result of numerous very large-scale developments (on former
JNR land, for example), the average annual supply for 2003–2006 reached 1.46 million square meters.
As the majority of these developments were completed in 2006, average annual supply for
2007–2010 is predicted to drop to approximately half of that for 2003–2006, i.e., to 760,000 square
meters.

㪉㪅㩷Trends in Supply Location:
Supply in Chiyoda Ward for 2007–2010 stands out at 40% or more, with a distinct focus on the areaaround Tokyo Station. Moreover, active development of medium- and small-sized buildings is seen in
the significantly integrated office-space area surrounding the business center.
Looking at the supply area for 2007–2010, Chiyoda Ward stands out, accounting for 42% of total
supply. By business area, there is a distinct focus on Otemachi-Marunouchi-Yurakucho area, where
the supply over the next four years will reach one million square meters. In Akasaka, Osaki/Gotanda,and Nishi-Shinjuku, the supply in each area exceeds 200 thousand square meters. Apart from thesedistricts, no other area stands out. Additionally, in the area surrounding the business center, in which
office buildings sprang up densely and rapidly after 2003—including the Otemachi-MarunouchiYurakucho area, Shiodome, and Roppongi—we are seeing active development of medium- andsmall-sized buildings.

㪊㪅㩷Trends in Supply from Rebuilding:
Future supply of large-scale office buildings will center on rebuilding. Business methods will continue
to diversify, with the use of special purpose companies (SPCs) and other innovations.
Between 2003 and 2006, construction on underutilized or unused land (including former JNR land)
accounted for approximately 70% of redevelopment, while construction due to rebuilding accounted
for only approximately 30% of redevelopment. Between 2007 and 2010, construction due torebuilding will account for the majority of redevelopment, at 54%—exceeding construction onunderutilized and unused land. In addition, between 2003 and 2006, real estate companies were themajor operators involved in rebuilding, carrying out 63% of rebuilding projects. Between 2007 and2010, rebuilding projects undertaken by real estate companies decreased to 38% of the total, andinstead SPCs, etc. involved in rebuilding have increased their share of projects dramatically, from 14%
to 32% of the total number undertaken. For the reasons mentioned above, business methods havediversified involving securitization of real estate in order to fund rebuilding initiatives.

For further information, please contact:
Research & Planning‫ޓޓޓޓ‬Miyuki Ban‫ޓޓޓޓޓޓޓޓ‬Building Leasing Department1
Mori Trust Co., Ltd.‫ޓ‬http://www.mori-trust.co.jp
Toranomon 2-chome Tower, 3-17 Toranomon 2-Chome, Minato-ku, Tokyo 105-0001 JAPAN
Tel: +81-3-5511-2357 / Fax: +81-3-5511-2409
E-Mail: ban-m@mori-trust.co.jp

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Future Market Outlook
A general survey of the market conditions for office space in Tokyo over the last few
years shows strong demand in a buoyant market due to the economic expansion. Fromthe latter half of 2003 vacancies began to decrease; as a result, since last year there hasbeen a clear trend toward higher rents. Additionally, demand shows no signs ofslackening as we move into 2007, indicated by the speed with which new large-scalebuildings have been reaching full capacity and other factors.
This startling ongoing market recovery can be seen as the result of a match between
demand and supply: demand due to corporate office-space strategies that promote
rebuilding and consolidation to accommodate expanding corporate business, and highsupply in favorable locations in central Tokyo. Even greater demand can be expectedbased on future office-space supply, in light of redevelopments underway in optimum
central metropolitan areas.
Moreover, with increasing concern over earthquakes and other disasters, many
companies are looking for characteristics such as a high capacity to withstandearthquakes in their search for building space, as well as the ability to provide backup
for infrastructure and equipment. These concerns may lead to an increase in demand
for moves to large-scale buildings featuring high safety standards and high reliability.
Taking the impending large reduction in supply into consideration, we predict that for
the foreseeable future the tight relationship between supply and demand and thetendency toward higher rents can be expected to continue, centering aroundlarge-scale office buildings in central Tokyo. On the other hand, it will become evenmore critical to promote the further supply of quality office space in order for thepresent positive economic conditions continue, considering the likely future shortageof vacancies and corresponding sluggishness in demand. In this sense, we look forward
to the early implementation of policies with an impact on the supply of office space infavorable metropolitan areas, including the disposal of and maximal use of government
assets, of which discussion has already begun.

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

KeyKeyCompleted supply
Incomplete supply under construction
Incomplete supply not yet under construction
Supply quantity

46
41

47

(Buildings)
50

49
43

40 37

29

27
23

22
17
14

1226

20

30
23

22
20

16
8

10

250
221

Supply volume200

1986 - 2006 average supply:
1,050,000 ট / year

2003 - 2006 average supply:
1,460,000 ট / year0

2007 - 2010 average supply:
760,000 ট / year

183
1999 - 2002 average supply:
790,000 ট / year

162

150

100

100

108 104

119

114 118

56

120

118

118
99

92

89

83

84

82

72

64
55

50
360
Supply volume (own buildings)

Supply quantity29
24（10,000 Ὦ）

40

36

33

33

'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

61

60
40
20

36

30

38

32
15

178

12

27
1138

32

25

23

22

1311

19

21

1799138

200

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

25,000 Ὦ / building（1987-1990）

38,000 Ὦ / building

40,000 Ὦ㩷/ building(1995-1998㧕

（1999-2002）

46,000 ≂ / building
38,000 ≂ / building

29,000 Ὦ / building(1991-1994㧕

（2003-2006）（2007-2010）

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Figure 3: Large-scale office supply volume in the 23 wards of Tokyo and individual key business districts(2007 - 2010)〔23 wards〕

Three centralwards
66％〔Business districts〕
Higashi-ikebukuro

Other 16 wards
Koto ward
Shinagawa ward
6%
Shibuya ward
3%

Koraku7%

8%

Chiyoda ward
35%

Shinjuku ward
10%

Jinbocho・
Ogawamachi
Sudacho

Iidabashi

Nishi-shinjuku

Akihabara

Yotsuya 3-chome
BanchoMinato ward
33% 6%

Hirakawacho

Chuo ward

Akasaka

Jingumae

Otemachi・Marunouchi
・Yurakucho

Kasumigaseki㨯
Nagatacho

AoyamaKiba, Toyocho
Ginza
TsukijiRoppongi

Shinbashi

Supply volume

Shiodome
Harumi

1,300,000 Ὦ

Chiyoda ward

Yaesu・
Nihonbashi・Muromachi

970,000Ὦ

ToyosuIkejiri-Ohashi

Chuo ward

190,000 Ὦ

Minato ward

530,000 Ὦ

Shinjuku ward

290,000 Ὦ

Shibuya ward

80,000 Ὦ

Shinagawa ward

240,000 Ὦ

Koto ward

180,000 Ὦ

Other 16 wards

220,000 Ὦ

Shinkiba

Shiba・Mita
Shibaura

Approx. supply volumeEbisu：400,000 Ὦ 〜
MeguroShinagawa(Konan)：200,000 Ὦ〜 400,000 Ὦ

RinkaiOsaki
Gotanda：100,000 Ὦ〜 200,000 Ὦ： 10,000 Ὦ〜 100,000 Ὦ

Figure 4: Trends in the top 10 districts in terms of large-scale office supply volume (2007 - 2010)(10,000 Ὦ)

50
Key

2007

Supply volume40

2008
2009
2010

30
20
100
OtemachiMarunouchi
Yurakucho

Yaesu
Uchisaiwaicho Shiodome
Nihonbashi Kasumigaseki
Muromachi Nagatacho

Akasaka

AoyamaNishi-Shinjuku Akihabara

Osaki
GotandaToyosu4/7

Figure 5: Large-scale office supply volume in the 23 wards of Tokyo and individual key business districts(2003 - 2006)〔23 wards〕
Other 16 wards
3%

Three centralwards
78％〔Business districts〕

Koto ward

Asakusa

Shinagawa ward
Shibuya ward
4%

7%
7%
Chiyoda ward
25%

Shinjuku ward
1%

Bancho࡮Kojimachi

Minato ward
47%

Ningyocho

Otemachi・Marunouchi
・Yurakucho
720,000Ὦ

Nihonbashi・Kyobashi
・Muromachi

Chuo ward
Kasumigaseki㨯Uchisaiwaicho

Akasaka

Supply volumeChuo ward
Minato ward

2,760,000 Ὦ

Shinjuku ward

60,000 Ὦ

Shibuya ward

210,000 Ὦ

Shinagawa ward

400,000 Ὦ

Koto ward

410,000 Ὦ

Other 16 wards

160,000 Ὦ

750,000Ὦ

670,000Ὦ

Hamamatsucho
Shinsen࡮Nanpeidai

Shirogane

Toyocho࡮Monzen-nakacho

Shiodome

Roppongi
Shibuya

1,470,000 Ὦ
380,000 Ὦ

GinzaToranomon

AoyamaChiyoda ward

Kinshicho

Uchikanda

Nishi-shinjuku
࡮Yoyogi

6%

Akihabara

Jinbocho・
Ogawamachi

Iidabashi
࡮MWFCP

HarumiToyosuShinkiba

Shiba・MitaEbisu

Shibaura

Approx. supply volume：400,000 Ὦ 〜
Shinagawa(Konan)：200,000 Ὦ〜 400,000 ὮRinkai

750,000Ὦ

Osaki
Gotanda：100,000 Ὦ〜 200,000 Ὦ： 10,000 Ὦ〜 100,000 ὮHigashi-Shinagawa

Figure 6: Trends in the top 10 districts in terms of large-scale office supply volume (2003 - 2006)(10,000 Ὦ)

50
Key

2003

Supply volume40

2004
2005
2006

30
20
100
OtemachiMarunouchi
Yurakucho

Nihonbashi
Kyobashi
Muromachi

Shiodome

Roppongi

Shinagawa(Konan)Iidabashi
Kudan

Akihabara

Osaki
GotandaToyosuHigashiShinagawa

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Note)

Figure 7: Supply Construction Areas for Medium- and Small-Sized Buildings<three central Metropolitan Wards><2003>

Idabashi

Akihabara

Kanda

Jinbocho

Ningyocho
Kojimachi

Otemachi࡮Marunouchi
࡮Yurakucho
Kayabacho

AoyamaAkasaka
Shinbashi
Toranomon
Roppongi

Ginza

Shiodome

Hamamatsucho<2006>

Idabashi

Akihabara

Mita
Jinbocho

Kanda

Ningyocho
Kojimachi

Otemachi࡮Marunouchi
࡮Yurakucho

Konan

Kayabacho

AoyamaShinbashi
AkasakaBusiness Areas in Which Increases
Have Been Noted for 5 Cases or MoreArea

20032006

Kanda

517

Kayabacho࡮Hacchobori

212

Ningyocho
࡮Kodemmacho

512

Kojimachi
࡮Bancho

411

Jinbocho࡮Ogawacho

28

Akasaka

28

Hamamatsucho

05

Ginza

Toranomon
Shiodome

Roppongi

Hamamatsucho

Mita

KonanNote) Based on the applications for posting of construction signs related to building construction
authorized from January to December each year, records per case have been kept by town
and local precincts of plans in which the total floor area (including office space) is less thanten thousand square meters. Plans whose major purpose is residential are not included.

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Figure 8: Percentages of large-scale office supply volume by site type〔2003-2006〕

Underutilized or unused site:
4,010,000 Ὦ (69%)

〔2007-2010〕

Rebuilding:
1,830,000 Ὦ(31%)

Others:2,950,000 Ὦ(45%)

Underutilized or unused sites:
1,430,000 Ὦ (46%)

Others:1,290,000 Ὦ(42%)

Rebuilding:
1,610,000 Ὦ(54%)

Former Japan
National Railway sites:
1,420,000 Ὦ (24%)

Former Japan National Railway sites:
140,000 Ὦ (4%)

Figure 9: Supply Ratio by Major Operator in Rebuilding〔2003-2006〕

Others:430,000 Ὦ(23%)

SPCs, etc.:
260,000 Ὦ(14%)

Real Estate Companies:
1,140,000 Ὦ (63%)

〔2007-2010〕

Others:480,000 Ὦ(30%)

SPCs, etc.:
510,000 Ὦ(32%)

Real Estate Companies:
620,000 Ὦ (38%)[Definition of terms]
Rebuilding:(Developments taking place on) land resulting from the demolition of buildings previously used as offices, hotels, residences, etc.
Underutilized and unused site:(Developments taking place on) land not previously used effectively, including land with intermixed parking lots, dilapidated
buildings, and a number of empty lots, concentrated residential-use land, former factories, former railway land, etc.
SPCs, etc.:
A scheme in which Special Purpose Companies (SPCs) are central to development, or in which SPCs are included among themajor operators.

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