Tokyo’s office vacancy rate fell in October to its lowest level in more than four years as demand for space outpaced supply, broker Miki Shoji Co. said.
The rate, a measurement of unoccupied space, fell to 7.56 percent last month from 7.9 percent in September and was at its lowest since June 2009, according to data released Thursday by Miki Shoji.
Tokyo’s office market has been recovering since the vacancy rate peaked in June 2012 amid efforts by Prime Minister Shinzo Abe to revive the economy. Average office rents in October rose to ¥16,237 per tsubo, the standard measure of property, its first increase since June 2012, the data showed. A tsubo is 3.3 sq. meters.
The Tokyo office market will improve as vacancies decline and rents increase, albeit at a fairly gradual pace, Kayoko Hirao, head of Japan research at DTZ, said in a report published Oct. 17.
The Oct. 1 “tankan” report measuring business sentiment showed that confidence among large manufacturers was at its highest since the early stages of the global credit crisis in 2007.
The Bank of Japan last month maintained its commitment to unprecedented monetary easing and reiterated its forecast that inflation will almost match its 2 percent target in the year starting in April 2015.
“The real market recovery will gather more momentum after the commencement of the new fiscal year, when companies are expected to increase capital investment as a reflection of the recent improvement in corporate performance,” DTZ’s Hirao said in the report.
About 24,000 tsubo of space was absorbed in October, according to the Miki Shoji report. That is 26 percent more than the 19,000 tsubo signed in September.