Real Estate/J-REIT: June 2026 Office Building Market in Tokyo’s Five Central Wards: Vacancy in the 1% Range; Rent Growth Above 10%; Office S/D Tightens Further

Research evidence excerpt

Real Estate/J-REIT: June 2026 Office Building Market in Tokyo’s Five Central Wards: Vacancy in the 1% Range; Rent Growth Above 10%; Office S/D Tightens Further

Update

July 9, 2026 06:51 AM GMT

Morgan Stanley MUFG Securities Co., Ltd.+MReal Estate/J-REIT | Japan Toshiyuki Anegawa

Equity Analyst

June 2026 Office Building Toshiyuki.Anegawa@morganstanleymufg.comTakuya Sato +81 3 6836-8914

Takuya.Sato@morganstanleymufg.com +81 3 6836-8913

Market in Tokyo’s Five Central

Wards: Vacancy in the 1% Range;

Rent Growth Above 10%; Office Real Estate

Japan

Industry View In-LineS/D Tightens Further J-REIT

Industry View Attractive

Key Takeaways

In June, the office building vacancy rate in Tokyo’s five central wards fell to 1.99%.

Limited activity in relatively newer buildings.

Average asking rent was ¥22,993 per tsubo per month (MoM +0.6%, YoY

+10.1%). It is on track to soon surpass the Jan 2008 peak of +13.6% YoY.

Need to closely monitor interest rate trends, but we expect rent growth to

outpace rate increases and maintain a bullish stance on real estate majors.

New office supply in Jun-Jul: There was no new building completions in June. In July,

Tokyo Tatemono’s "TOFROM YAESU THE FRONT" (gross floor area of approx. 3,700

tsubo) is expected to have some vacancy remaining, whereas Mitsubishi Estate’s

"Otemachi Gate Building" (gross floor area of approx. 25,800 tsubo) is scheduled to

be completed at full occupancy. Office floor space is becoming increasingly scarce

even in Osaka: The July issue of Nikkei Real Estate Market Report said that Osaka’s

office vacancy rate, based on on-the-ground observations, is in the high-1% range.

With surging construction costs limiting locations where investment can be

recouped and thinning supply, demand for high-spec office buildings remains firm,