Survey of Large Office Building Supply
in the 23 wards of Tokyo '10

May 6, 2010

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 the 23 wards of Tokyo, based on various publishedmaterials, field surveys, and interviews. The results of the most recent surveys 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 orresidences, hotels, etc.—only the floor area purely for office use is taken into consideration.
[Survey Date: December 2009]

A clear trend toward decentralization of supply locations〜Supply in the three central wards of Tokyo dropped to low levels,and the proportion of theoverall supply accounted for by these wards declined dramatically〜
Main Results of This Survey

1. Changes in Supply Volume:
Despite a temporary increase in supply volume in the 23 wards of Tokyo as a whole, supply in thethree central wards remains in a declining trend.
For the third consecutive year starting with 2008, the expected figure for supply in 2010, just
830,000 square meters, is below the average for the past 20 years (1.09 million square meters/year).
While supply is projected to increase to 1.46 million square meters in 2011 and 1.68 million square
meters in 2012, a return to restrained supply trends appears likely in 2013. Additionally, construction
starts on certain projects have been postponed, suggesting supply volumes in 2011-2012 may also
decline.
Supply in the three central wards, characterized by a gradual decline in recent years, is expected
to continue declining through the years 2010-2013, further increasing the scarcity value of officebuildings in prime locations in central Tokyo.
1.0
0.8
0.6
0.4
0.2
0.0

2. Trends in Supply Location:
The share of supply accounted for by Tokyo's three central wards has declined significantly, with agrowing trend toward decentralization of supply locations.
Supply volumes in the three central wards over the years 2010-2013 are projected to fall toroughly 70% of recorded levels for the years 2006-2009. The share accounted for by these three
central wards is projected to decline from 72% to 51%. A look at projections by ward shows anexpected increase in the share of Chuo Ward, due to an increase in supply in the Yaesu, Nihonbashi,and Kyobashi areas, but major declines in the shares of Chiyoda Ward and Minato Ward. Outside thethree central wards, the shares accounted for by Koto Ward, with its growing supply in the Rinkai
area, and by Shinjuku Ward, with expanding supply in the Nishi-Shinjuku and Shinjuku areas, areprojected to increase significantly. Koto Ward, in particular, is expected to account for a share in theoverall supply second only to Chiyoda Ward. Supply is also increasing in areas such as Nakano,showing a clear trend toward decentralization of supply locations.
3. Trends by Development Site:
Rebuilding accounts for a significant portion of the office space supply in the three central wards;
thriving large-scale developments on new lots characterize emerging supply in other areas.
A look at supply trends by development site in the years 2010-2013 indicates a major decline indevelopment of unused or underutilized sites in the three central wards, with a growing focus on
rebuilding exhibited within the actual supply structure. This trend primarily revolves around the area
near Tokyo Station. The Yaesu, Nihonbashi, and Kyobashi areas, as well as the Otemachi, Marunouchi,and Yurakucho areas, are expected to see full-fledged rebuilding of office stock. Outside the three
central wards, supply based on unused or underutilized sites continues to account for 80% or moreof the total. Large-scale developments on unused land are expected to thrive in the Rinkai area andelsewhere.

For further information, please contact:
Research & Planning
Yuko Toyama
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: toyama-y@mori-trust.co.jp

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Future Market Outlook
Since 2004, when large-scale developments on the former Japan National Railway land
peaked and then began to decline, the supply structure in central Tokyo has beencharacterized by rebuilding, as aging office stock has undergone rapid updates. Thisdevelopment has focused in the Otemachi, Marunouchi, and Yurakucho areas, andredevelopment in these areas, which offer the highest potential in central Tokyo, hassparked a wave of updates to urban functions in existing business districts andstimulated demand among businesses to return to central Tokyo. In central Tokyo,
characterized by a shortage of sites for new large-scale development projects,
rebuilding is expected to account for a significant portion of the office supply
introduced to the market over the medium to long term. Backed partly by the
deep-rooted corporate orientation to locate in central Tokyo, the scope of areas inwhich aged office stock undergoes updates is expected to expand beyond the Yaesu,Nihonbashi, and Kyobashi areas.
The growing interest and importance of environmental issues and increasingly
rigorous environmental regulations may also serve as new factors promoting
rebuilding. Growth in the scope of businesses subject to regulation under theamended Act on the Rational Use of Energy and requirements to reducegreenhouse-gas emissions under the Tokyo Metropolitan Government's amended
environmental protection regulations appear likely to increase environmental
awareness among businesses and further sharpen the market advantages of newly
constructed buildings with their superior environmental performance. Stronger
regulations may also encourage the market to weed out certain properties based on
environmental performance, hastening the rebuilding of older facilities.
Since this trend toward supply through rebuilding is most pronounced in central Tokyo,
which has matured as a business district, it may serve as a powerful demand stimulant.
Additionally, the temporary loss of space in existing buildings due to rebuilding will domuch to reconcile the gap between supply and demand, easing the increase in officestock and creating demand for relocation from buildings removed from the market.
Advances in the rebuilding of aged stock in central Tokyo and related improvements inenvironmental performance may help stimulate the rental office market, which has
begun to show signs of recovery.

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Figure 1: Trends in supply volume of large-scale office buildings[a.the 23 wards of Tokyo](Buildings)

49

50
43

47

40

29
29

22

27

24

25

20

21

20
1430

30

27

23
17

40

36

36

33

37

16
10

Supply quantity468(10,000㎡)
250

0221

Supply volume200183

1990-2009 average supply:
1,090,000㎡/year

168

162
146

150
108 104 114

119

118

118
99

92

100

89

740

84

82

72

50

119

118

83

64
41

36

'90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13[b.Three central wards andother than three central wards]
Key

Supply in the 23 wards(constructioncomplete)
Supply in the 23 wards(construction not yet complete)
Supply in the 23 wards(construction not yet started)
Supply in the three central wards(construction complete)（10,000㎡）
250

Supply volume

Supply quantity in the 23 wards of Tokyo

200
150
100

Supply in the three central wards(construction not yet complete)

50

Supply in other area

0'02

'03

'04

'05

2002-2005 average supply
in the three central wards:
1,040,000㎡/year

'06

'07

'08

'09

2006-2009 average supply
in the three central wards:
770,000㎡/year

'10

'11

'12

'13

2010-2013 average supply
in the three central wards:
560,000㎡/year

Figure 2: Trends in average total office floor area per building

43,000㎡/building

43,000㎡/building

42,000㎡/building

45,000㎡/building(1998-2001)(2002-2005)(2006-2009)(2010-2013)

35,000㎡/building
26,000㎡/building(1990-1993)(1994-1997)(10000㎡)

Average size
per building

87.0
5.8

64

3.7
2.7 2.8 2.5 2.5

4.5
3.2 3.6 3.2

2.6

4.0 4.4

5.6

5.1
3.3

4.1

5.1

4.4
3.0 3.4 2.8

4.1

20

'90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11'12 '13

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Figure 3: Large-Scale Office Supply by Ward

〔2006-2009〕〔2010-2013〕
Three central wards :3,070,000㎡(72%)
Other areas:1,220,000㎡(28%)

Three central wards :2,240,000㎡(48%)
Other areas:2,140,000㎡(52%)

Supply volume

Shinagawaward

other 16 wards

Chiyoda ward

Koto 6%ward
10%

Chuo ward

210,000㎡

Minato ward

1,320,000 ㎡

Shinjuku ward

60,000 ㎡

Shibuya ward

50,000 ㎡

Chiyoda ward
36%

10%
Shibuyaward
1%
Shinjuku
ward
1%Minato ward
31%

Shinagawa ward
Koto ward
Chuo ward
5%
Other 16 wards

Supply volume
other 16 wards
10%

1,540,000㎡

420,000 ㎡
450,000 ㎡
240,000 ㎡

Shinagawaward
Shibuyaward
4%

Kotoward
18%

Chiyoda ward
27%

7%

Chuo ward12%
Minatoward
12%10%
Shinjukuward

Chiyoda ward

1,200,000 ㎡

Chuo ward

540,000 ㎡

Minato ward

500,000 ㎡

Shinjuku ward

430,000 ㎡

Shibuya ward

190,000 ㎡

Shinagawa ward

310,000 ㎡

Koto ward

770,000 ㎡

Other 16 wards

440,000 ㎡

Figure 4: Trends in the top 10 districts in terms of large-scale office supply volume(10,000㎡)
60[2006-2009]50

Supply volumeKey960,000㎡

2006
2007

600,000㎡

2008
40

2009
370,000㎡

30

300,000㎡
240,000㎡

160,000㎡

160,000㎡

110,000㎡

110,000㎡

100,000㎡

Sotokanda

Konan

Shiodome

ShibaMitaRInkai

Yaesu
Nihonbashi
Kyobashi

20
100Otemachi
Marunouchi
Yurakucho

Akasaka
Roppongi

Osaki
GotandaToyosu〔2010-2013〕（10,000㎡）660,000㎡
60Key

2010502011

Supply volume

2012
40

310,000㎡

290,000㎡

270,000ｍ

270,000㎡

250,000㎡

30

240,000㎡

2013

210,000万㎡
170,000㎡

160,000㎡

NakanoAkasaka Kandajinbocho
Roppongi Kandaogawamachi

Shinjuku

20
100Otemachi
Marunouchi
Yurakucho

RInkai

Osaki
GotandaYaesu
Nishi-shinjuku
Nihonbashi
KyobashiToyosu4/7

Figure 5: Large-scale office supply volume in the individual key business districts[2006-2009]

Sotokanda

Kinshicho

Iidabashi
Kudan

Chiyoda ward Otemachi
Marunouchi
Yurakucho
960,000㎡

BanchoKojimachi

AoyamaYaesu
Nihonbashi
KyobashiUchisaiwaicho
Kasumigaseki
Nagatacho

Akasaka
Roppongi
Toranomon

Minato ward

Chuo ward

Shiodome

ToyosuTsukishima
Kachidoki
HarumiShiba
Mita

Approx.supply volume

Shibaura
Kaigan：400,000㎡～

Rinkai：200,000㎡

Konan～400,000㎡：100,000㎡～200,000㎡

Osaki
Gotanda： 50,000㎡～100,000㎡[2010-2013]

NakanoNishi-Shinjuku

Jinbocho

ShinjukuChiyoda ward Ogawamachi
BanchoKojimachi

Yoyogi

Uchisaiwaicho
Kasumigaseki
Nagatacho

Akasaka
Roppongi

Muromachi
HonchoOtemachiMarunouchi
Yurakucho
660,000㎡

Yaesu
Nihonbashi
KyobashiToyocho
Kiba

Chuo ward
Ginza
ToyosuShibuyaMinato ward

Nanpeidaicho

Tsukishima
Kachidoki
HarumiApprox.supply volume：400,000㎡～：200,000㎡

Konan～400,000㎡：100,000㎡～200,000㎡： 50,000㎡

Osaki
GotandaRinkai～100,000㎡

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Figure 6: Supply of large-scale office buildings on development sites[Three central wards][Other districts](10,000㎡)(10,000㎡)

350

350

300

300
1,020,000㎡
(33%)

250
340,000㎡
(15%)

200

150
2,050,000㎡
(67%)

100

1,900,000㎡
(85%)

50

Supply volume

Supply volume

250

200

1,760,000㎡
(82%)

150

100

1,100,000㎡
(90%)

50

0

2006-20092010-20130

380,000㎡(18%)

120,000㎡(10%)

2006-20092010-2013

Figure 7: Supply by development site in the top 10 areas in terms of supply volume<2010-2013>(10,000㎡)

Supply volume

100

50

0

OtemachiMarunouchi
Yurakucho

RInkai

Osaki
GotandaYaesu
Nishi-shinjuku
Nihonbashi
KyobashiToyosuAkasaka Kandajinbocho
NakanoRoppongi Kandaogawamachi

Shinjuku

Key

Development of unused orunderutilized land (public land)
Development of unused orunderutilized land (other land)
Rebuilding[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 8: Supply of large-scale office buildings on development sites
in the three central wards of Tokyo

2002-2005 average supply
in the three central wards:
1,040,000㎡/year(10,000㎡)
200

2006-2009 average supply
in the three central wards:
770,000㎡/year

2010-2013 average supply
in the three central wards:
560,000㎡/year

Supply volume

150

100

50

0

'02

'03

'04

1,300,000㎡(31%)
2,840,000㎡(69%)

2002-2005

'05

'06

'07

'08

'09

'10

'11

'12

'13

340,000㎡(15%)
1,020,000㎡(33%)
2,050,000㎡(67%)

2006-2009

1,900,000㎡(85%)

2010-2013

Key

Development of unused orunderutilized land
Rebuilding

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