Tokyo Grade A Vacancy Rate Increase Continues; Largely Offset by Drop in A-Minus Vacancy Rate

March 8, 2017

Tokyo, March 8, 2017 - CBRE today released its preliminary February 2017 data on office vacancy rates and average assumed achievable rents in Japan’s three major cities: Tokyo, Osaka, and Nagoya.

In February 2017, the Grade A office vacancy rate in Tokyo was up 0.2 points month-over-month (m-o-m) to 4.5%. Meanwhile, the Osaka Grade A vacancy rate was flat to 1.9%, and the Nagoya Grade A vacancy rate was down 0.2 points to 1.9%. Assumed Achievable Rents for Tokyo Grade A buildings were up 0.1% m-o-m, Osaka Grade A rents were up 0.2% m-o-m, and Nagoya Grade A rents were up 4.7% m-o-m.

With regard to All-Grade vacancy rates, Tokyo's 23 wards were down 0.1points m-o-m to 2.6%, Osaka was flat m-o-m at 3.2%, and Nagoya was down 0.1 points m-o-m to 3.2%. For further details on each city, please refer to the following tables and charts.

Survey Outline

□ Vacancy Rate	Vacancy is based on the data that was available at the time of compiling the survey
□ Assumed Achievable Rent	Assumed achievable rent is based on sample surveys of the applicable buildings (inclusive of service charges; not taking into account incentives such as free rent)
□ Definitions of Grades (Tokyo/Osaka/Nagoya)	■ Grade A As a general rule, buildings located in regions () with a high concentration of office buildings that fulfill the following conditions: typical floor plate of 350 tsubo or more (500 tsubo or more in Tokyo), net floor area of 6,500 tsubo or more, total floor space of 10,000 tsubo or more, and age of less than 11 years () Regions with a high concentration of office buildings: Tokyo – centered on the central 5 wards; Osaka – centered on Kita, Chuo and Yodogawa wards; Nagoya – centered on Nakamura, Naka, Higashi and Nishi wards ■ Grade A – Minus (Tokyo only) As a general rule, office buildings located in regions with a high concentration of office buildings that fulfill the following conditions: typical floor plate of 250 tsubo or more, net floor area of 4,500 tsubo or more, total floor space of 7,000 tsubo or more, and structure based on new earthquake resistance standards ■ Grade B As a general rule, office buildings located in regions with a high concentration of office buildings that fulfill the following conditions: typical floor plate of 2,000 tsubo or more (in Tokyo, typical floor plate of 200 tsubo or more and total floor space of less than 7,000 tsubo), and structure based on new earthquake resistance standards ■ All-Grade Rental office buildings within the office area comprising 13 cities nationwide set independently by CBRE, as a general rule with a total floor space of 1,000 tsubo or more and structure based on the new earthquake resistance standards

CBRE’s next press release on the office market is scheduled for April 19, 2017.

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