Japan Brief: Vacancy disparity rates provide insight into rising rents

With an increasing number of cities in Japan recording vacancy rates below past average levels, rents are on the rise nationwide. Rents are also exhibiting growth in cities with above-average vacancy rates, although in these cases, vacancies tend to be heavily skewed toward certain properties. This leaves most buildings operating at close to full capacity, creating a solid foundation for rental increase. However, should vacancies become more evenly spread due to tenants relocating to large single-building vacancies, competition to attract tenants may rise, leading to a slowdown in rental growth.