Japan housing & real estate: Office vacancy rate below 2%, rents up 10% annualized

Research evidence excerpt

Japan housing & real estate: Office vacancy rate below 2%, rents up 10% annualized

Global Markets Research

9 July 2026Japan housing & real estate

EQUITY: JAPAN HOUSING & REAL ESTATE

Office vacancy rate below 2%, rents up 10% Research Analysts

annualized Japan housing & real estate Daisuke Fukushima - NSC

daisuke.fukushima@nomura.com

Rent rises driven by state-of-the-art new buildings +81 3 6703 1150

Rental office market in Tokyo's five central wards has been strengthening further

Major rental office broker Miki Shoji released the results of its June 2026 survey of the

rental office market in Tokyo’s five central wards on 9 July. Advertised rents rose 10% y-y

as office rental demand remained strong, as evidenced by the 8bp m-m improvement in

the vacancy rate to 1.99%.

Although the sustained rise in interest rates has caused some market observers to

express concern over a deterioration in margins at real estate leasing operations, there is

a growing consensus that strong rent increases will enable companies to secure and

improve margins. Despite this, real estate stocks have been soft not only because rising

interest rates have shifted stock market concerns to the risk of a decline in real estate

sales volumes, but also because attention has shifted sharply to AI and semiconductor-

related stocks amid ongoing concerns about rising interest rates in Japan and the US and

persistent tensions in the Middle East. However, real estate companies look to have been

performing steadily versus full-year guidance, and this might prompt additional share

buyback announcements designed to boost capital efficiency and shareholder returns.

While we expect office rents in the five central wards of Tokyo to be driven by state-of-the-