Vacancies in Tokyo prime office buildings to become increasingly scarce

One of the key factors behind the recent drop in Tokyo office vacancy rates is an increase in major relocations to higher-grade premises. Over the course of 2024, large-scale relocations of roughly 1,000 tsubo or greater in Tokyo recovered to levels just below those seen prior to the COVID-19 pandemic. The main reason for these relocations are office upgrades, which were mentioned by the largest number of tenants since 2019. This has led to a surge in the occupancy rate of recently completed Grade A buildings, which are primarily fulfilling these relocation needs, as well as an increase in the pre-leasing rate of future developments. With tenant appetite for office upgrades and expansions projected to remain robust, CBRE forecasts vacancies in relatively new and centrally located buildings to become increasingly sought-after owing to their scarcity.