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Recent and future trends in Central Tokyo’s leasing market

January 9, 2025 / By  

As of the third quarter of 2024, gross leasing volumes of Tokyo Grade A offices reached approximately 129,800 sqm, marking a 56% increase quarter-on-quarter and a 3% rise year-on-year.

Figure 1: Historical gross leasing volumes in Central Tokyo

Source: JLL Tokyo

Leasing activity remains strong as more companies require workers, particularly junior staff, to return to the office. Additionally, businesses are expanding and hiring new employees, thus requiring more workspace, while stable economic growth and record-high corporate earnings are boosting leasing activity.

Recently, the most active sectors in relocation have been information services, manufacturing, financial services, and metals and mining.

A year ago, one of the largest deals since leasing activity tracking began occurred. Over 90,000 sqm of space was signed for Takanawa Gateway City Linkpillar I North, an office redevelopment near the bay area scheduled to open next May.

In the third quarter of 2024, the share of precommitments compared to leasing volumes increased. This rise is due to the anticipated new supply of Tokyo Grade A office space, which will surpass 500,000 sqm in 2025, with an additional 480,000 sqm entering the market in 2026.

Despite rising construction costs and an owner-friendly environment, leasing activity for future projects remains strong, as most existing buildings have little to no vacant space.

Japan’s real GDP is expected to increase by 1.2% next year compared to -0.2% at the end of this year, according to Oxford Economics.

Amid a favourable macroeconomic backdrop, corporations are expected to remain forward-looking, keeping leasing activity in Central Tokyo robust.

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