Demand for office space in central Tokyo is slowing。Despite the opening of large buildings, the vacancy rate of office space in central Tokyo has now exceeded 6%, the highest level in 10 years, as more and more domestic employees choose to work from home and foreign companies are assessing their operations.。

According to office brokerage firm Miki Shoji, office vacancy rates in the five central districts of Tokyo - Chiyoda, Central, Port, Shinjuku and Shibuya - were 6 as of July..46%, more than 5% for 30 consecutive months。Other regions are also on the verge of exceeding pre-neo-crown levels, with Osaka at 4.6%, Nagoya 5.5%。

In March, Mitsui Fudosan's Tokyo Midtown Yaesu opened in front of Tokyo Station.。One real estate executive said, "It's a miracle to be able to open a full floor.。The company initially expected that it would be difficult to attract tenants in 2023 due to the large supply of office space in large buildings.。

According to a Mori Trust survey, the supply of office buildings with an area of more than 10,000 square meters in Tokyo's 23 districts is expected to grow by 2% year-on-year in 2023..7 times, reaching 1.3 million square meters, a three-year high。In addition, Mori Trust expects that by 2025, the supply of more than 10,000 square meters of office space in Tokyo will continue to increase by 1.41 million square meters.。

Kohei Kawai, director and head of research at real estate services firm Colliers International Japan, said that "there are significantly fewer corporate customers looking for office space compared to 2022," or weak corporate demand.。Rents in some areas, including Shinagawa, are down about 30 percent from three years ago, the company said.。

One of the drivers behind this trend is the rise of remote work。A survey by the Tokyo Metropolitan Government shows that more than 45% of company employees in Tokyo worked from home in July。The data, while actually below the recent peak of more than 60%, is well above the 24% before the outbreak in March 2020.。

In response to this, companies are adapting the way their offices operate to meet their employees' needs for mixed work - with the option to work from home or in the office.。

Housing equipment maker Lixil moved its headquarters in November 2022 to begin a "free seat" program, resulting in a sharp drop in the number of employees visiting the company every day and a nearly 90% reduction in office space demand.。Japanese telecom giant NTT began encouraging employees to work from home last year and continues to integrate offices, especially in urban areas.。

In addition, foreign companies that have always valued office space in urban centers are downsizing their offices。For example, Deloitte Tohmatsu Group scaled back its demand for office space in 2021.。

At the same time, some U.S. technology companies are cutting jobs at home and abroad.。Toyokazu Imazeki, chief analyst at Sanko Estate (Sanko Estate), said the companies are assessing their office space needs and have decided to gradually scale back their offices in Japan.。