Japan Report - Tokyo Office Beyond COVID Apr 2022

・80% of central Tokyo companies plan to use hybrid work post-pandemic
Once the pandemic reaches a conclusion, approximately 80% of companies in Tokyo 23 wards plan to use hybrid working schemes combining remote work with office-based work, compared to a significantly lower figure of around 60% in other cities. The greatest changes in working styles and office usage are therefore expected to be observed in Tokyo.

・No direct relationship between lower office attendance rates and office space reductions
The survey detected no direct relationship between lower office attendance rates and planned future office floor space reductions. In most cases, it appears any excess space will be repurposed for alternate use.
 
・Larger companies more likely to reduce space, but no consequent drop in Grade A demand expected
Companies with more office space are statistically more likely to want to reduce that space in the coming years. As a result, vacancy rates are likely to continue rising. However, this does not mean that Grade A office demand will decline. In fact, it is Grade A buildings whose vacancy rates have risen by the smallest margin since the advent of the pandemic.
 
・New normal working styles to rapidly take shape over the next two years
With the survey finding that more than 20% of companies have begun to take concrete moves to implement their post-pandemic office strategies, this will create opportunities for office landlords to secure new tenants. At the same time, the increase in high-quality office building supply slated for the next few years will provide prospects for tenants to implement new office designs that accommodate hybrid working styles and consider issues of worker health and environmental responsibility. These trends will ensure new workplace strategies for the post-pandemic era will rapidly take shape in the coming two years.