PRESS RELEASE. Office Rent Index for Q (Apr Jun) Office Rent Index

Transcription

1 PRESS RELEASE Sanko Estate Co., Ltd. Ginza Sanwa Bldg. --1 Ginza, Chuo-ku Tokyo, Japan -1 TOKYO, August Sanko Estate NLI Research Institute release for Q 1 (Apr Jun) Sanko Estate announces Q 1 of Class A, B and C* in central Tokyo**. This innovative index, developed jointly with NLI Research Institute, is based on the contracted rent instead of the asking rent which is commonly referred to monitor market trend. for Q 1 (Apr Jun) Class A (excluding CAM***) 3,95 yen/tsubo Q-O-Q 1,939 yen/tsubo 1. % Q-O-Q. points Class B (excluding CAM),73 yen/tsubo Q-O-Q yen/tsubo.9 % Q-O-Q.1 points Class C (excluding CAM) 15,919 yen/tsubo Q-O-Q 93 yen/tsubo 1.1 % Q-O-Q.3 points This release data (PDF) of is available on; (English) (Japanese) Summary for Q 1 Class A office rent in central Tokyo surpasses previous peak for the first time in eleven quarters. Class B office rent is going up slowly and approaching the latest peak recorded three quarters ago. Class C office rent remains around 1, yen/tsubo with small changes. Methodology * Class A, B and C: Refer each guideline on page, 3 and respectively ** Central Tokyo: Tokyo Central 5 Wards and major business districts in surrounding areas ***CAM: Common Area Maintenance fee is constructed on the bases of contracted rent data collected by Sanko Estate. NLI Research Institute receives the anonymous data excluding detailed address and applies statistical analysis, the multi-variable hedonic regression modeling. Sanko Estate releases monthly rent (JPY/tsubo) and its Y-O-Y change every quarter by three building categories namely Class A, Class B and Class C. For further information, please contact: International Department, Sanko Estate Co., Ltd. Tel: , Fax: contact@sanko-e.co.jp PRAP Japan, Inc. ka-shibata@prap.co.jp, e-yonezu@prap.co.jp

2 Central Tokyo Class A Office and 1 5, 1 5,, 35, 3, 5,, 15, 'Q '3Q 'Q '5Q 'Q '7Q 'Q '9Q 'Q '11Q '1Q '13Q '1Q '15Q '1Q '17Q '1Q Class A '15Q '15Q3 '15Q '1Q1 '1Q '1Q3 '1Q '17Q1 '17Q '17Q3 '17Q '1Q1 '1Q (JPY/tsubo) 33,39 35,5 3,7 33,995 31,3 33,73 33,75 33,39 3,755 3,1 3,599 35,13 3,95 (%) Source: Sanko Estate ( Rate), Sanko Estate NLI Research Institute (Office ) Central Tokyo Class A office rent increases by 1,939 yen/tsubo from the previous quarter to 3,95 yen/tsubo (excluding CAM). It also surpasses previous peak of the rent after the financial crises at 35,5 yen/tsubo in Q3 15 for the first time in eleven quarters. As significantly low vacancy rate displays, current market conditions are continuously favorable for the landlords and pushing the rent upward. Class A office vacancy rate further declines to 1.% for the first time since Q37.Strongoffice demand is expanding into under-construction buildings, and most of them have been fully leased at the time of completion recently. Strong labor market helps to increase the number of workers, particularly females and seniors, to the record high and fuels the demand continuously. Class A office guidelines Subject areas: Tokyo Central 5 Wards and major business districts in surrounding areas (such as Osaki, Meguro, and Iidabashi) Total floor area:, tsubo or larger / Area per standard floor: 3 tsubo or larger Years since construction: 15 years maximum, while major refurbishment is also considered. Facilities (as a general rule): Ceiling height.7m or more, individual air conditioning, high anti-seismic and environmental performance

3 Central Tokyo Class B Office and 35, 3, 5,, 15,, 'Q '3Q 'Q '5Q 'Q '7Q 'Q '9Q 'Q '11Q '1Q '13Q '1Q '15Q '1Q '17Q '1Q Class B '15Q '15Q3 '15Q '1Q1 '1Q '1Q3 '1Q '17Q1 '17Q '17Q3 '17Q '1Q1 '1Q (JPY/tsubo) 1,19 1,71 1,1 19,971 19,33 19,73 1,35 19,7 19,375, 19,,,73 (%) Source: Sanko Estate ( Rate), Sanko Estate NLI Research Institute (Office ) Central Tokyo Class B office rent increases by yen/tsubo from the previous quarter to,73 yen/tsubo (excluding CAM). The rent is going up slowly and approaching the latest peak recorded three quarters ago. Along with the decline of vacancy rate, the rent is approaching 1, yen/tsubo again. The corresponding vacancy rate declines for seven consecutive quarters to.9% and hits a new low for three quarters in a row. The pace itself is slowing down due to the shortage of vacant space whereas strong office demand remains unchanged. Class B office guidelines Excluding the buildings classified as Class A, Class B includes all the remaining buildings with tsubo or larger area per standard floor including ex- Class A. Subject areas: the same as Class A Years since construction: No limitation 3

4 Central Tokyo Class C Office and 1 35, 3, 5,, 15,, 'Q '3Q 'Q '5Q 'Q '7Q 'Q '9Q 'Q '11Q '1Q '13Q '1Q '15Q '1Q '17Q '1Q Class C '15Q '15Q3 '15Q '1Q1 '1Q '1Q3 '1Q '17Q1 '17Q '17Q3 '17Q '1Q1 '1Q (JPY/tsubo) 13,39 13, 1,3 15, 15,1 1,7 15,35 15,771 1,91 15,7 15,97 1,1 15,919 (%) Source: Sanko Estate ( Rate), Sanko Estate NLI Research Institute (Office ) Central Tokyo Class C office rent turns to decrease by 93 yen/tsubo from the previous quarter to 15,919 yen/tsubo (excluding CAM). The rent remains around 1, yen/tsubo with small changes. Class C vacancy rate has declined by.3 points to 1.1%. It falls below the previous bottom in 1Q 7 and hits a new low for the first time in 11 years. It continues to decline for over seven years after the peak at.7% in Q3, and the demand-and-supply balance has been significantly tightened. rates of each three classes have fallen around 1%, and the shortage of vacant space is largely recognized across the market. Class C office guidelines Class C includes all the buildings with to less than tsubo area per standard floor. Subject areas: the same as Class A Years since construction: No limitation

5 Central Tokyo Class A, B and C Y-O-Y Change (%) 'Q '3Q 'Q '5Q 'Q '7Q 'Q '9Q 'Q '11Q '1Q '13Q '1Q '15Q '1Q '17Q '1Q Class A Class B Class C '15Q '15Q3 '15Q '1Q1 '1Q '1Q3 '1Q '17Q1 '17Q '17Q3 '17Q '1Q1 '1Q Class A 17.% 17.5% 7.5% 9.1% -5.3% -5.5%.% -1.% 9.9%.1%.%.%.3% Class B 13.% 5.%.% 5.1%.7%.3%.7% -1.1%.%.% 7.% 1.5% 7.% Class C.9%.1% 1.% 1.5% 9.5%.%.%.%.9%.%.1%.% -3.5% Source: Sanko Estate NLI Research Institute Y-O-Y changes of each Class A, B and C are +.3%, +7.% and -3.5% respectively. Although Y-O-Y change of Class C turns to negative for the first time in thirteen quarters, Class C office rent appears to be stable due to the tightened demand-and-supply balance in the market. About Sanko Estate Sanko Estate is regarded as the leading provider of real estate services in Japan; consistently representing the largest percentage of office space transactions owned by major developers and landlords. Since 1977, Sanko Estate has helped thousands of foreign and domestic firms find the best office space throughout Japan for their needs and budgets. The company offers comprehensive real estate services including consulting and market research as well as office leasing services. 5