Tokyo's skyline is set to welcome 45 new skyscrapers by the time the city hosts the Olympics in 2020, as a surge of buildings planned in the early years of Abenomics near completion.
The capital will see nearly 50 percent more new high-rise space in the next three years than it did in the preceding three, Toyokazu Imazeki, chief analyst at office leasing and consulting firm Sanko Estate Co Ltd., said in an interview. He said the increase was fueled by the fiscal expansion and monetary easing under Prime Minister Shinzo Abe's economic program, launched after he took office in late 2012.
"This marks the timing for completion of buildings planned from about 2013 when developers were expecting the economy to expand," Imazeki said.
The increase in building was supported not only by Abe's expansionary policies but also Japan's ultra-low interest rates, he said.
New office space in buildings with floors of over 661 sq. meters in Tokyo's three central wards will rise to about 1.8 million sq. meters in 2020 from 1.2 million sq. meters in the three years to 2017, Imazeki said.
As well as properties in areas such as the Marunouchi district near Tokyo Station, a 41-floor new main building at the iconic Hotel Okura is scheduled for completion in 2019.
Seventy-five percent of new constructions in the 2016-2018 period will be in Chiyoda, Chuo and Minato wards, compared with 61 percent from 2011 to 2015, according to Mori Building Co Ltd. research.
"Most of the buildings are centered on the three prime areas in central Tokyo," said Takashi Ishizawa, a senior researcher at Mizuho Securities. "This could heat up competition for tenants in other areas of the city" as office occupiers are drawn to the premier locations, he said.
Ishizawa added there will be demand tied to Tokyo's hosting of the Olympics.