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Further improvements to average rents and vacancies round off a positive year, with observers maintaining an optimistic view for 2025.
- Office rents increased over successive quarters in 2024 across Grade A and Grade B properties, while strong improvements were made to average vacancy throughout the year. Some markets have nearly recovered to their ultra-tight levels.
- Average Grade A office rents in the C5W increased by 2.0% quarter-on-quarter (QoQ) and 4.2% year-on-year (YoY) to JPY33,947 per tsubo per month.
- The average Grade A office vacancy rate in the C5W decreased by 0.8 percentage points (ppts) QoQ and 0.9ppts YoY to 2.3%.
- Average large-scale Grade B office rents increased by 1.6% QoQ and 4.1% YoY to JPY25,548 per tsubo per month.
- Vacancy rates in the Grade B market fell by 0.3ppts QoQ to 2.6%, an annual decrease of 1.0ppts.
- Despite some concerns regarding potential instability, the large pipeline of new office supply in 2025 has attracted positive attention from tenants.
- Pockets of high vacancy persist among older properties in locations with poorer accessibility, suggesting that bifurcation may remain in the market.
- Regional markets have performed well amid strong economic and corporate performance.