#Japan #Tokyo #Sanko Estate #Tokyo Real Estate #Office Rent Index

Overview of the Office Rent Index Q4 2025

On January 30, Sanko Estate Co., Ltd. released the Office Rent Index for the fourth quarter of 2025, in collaboration with the NLI Research Institute. This report provides crucial insights into the Tokyo office market trends based on transaction rents.

Key Findings for Q4 2025

The report highlights that:
1. Class A Buildings: Rents have returned to the 35,000 yen per tsubo mark, a significant recovery since the second quarter of 2021, with rents at 35,492 yen per tsubo, marking an increase of 1,410 yen from the previous quarter. Notably, this represents nine consecutive quarters of rent growth, with a year-over-year increase also observed for seven consecutive quarters.
2. Vacancy Rates: The vacancy rate for Class A buildings decreased by 0.7 percentage points to 0.6%, falling below 1% for the first time since the third quarter of 2020. This decline is largely due to active uptake in newly built and recently constructed buildings in areas such as Minato Ward. Despite a strong demand for office spaces, the anticipated secondary vacancies from tenants moving into newly constructed buildings have not manifested as expected, leading to a significant tightening in supply within key urban areas.

B Class Buildings

For Class B buildings, the situation is a bit different. In Q4 2025, rents stood at 22,710 yen per tsubo, a decrease of 1,515 yen from the previous quarter. However, it is important to note that year-over-year variations indicated a continuous nine-quarter upward trend. Vacancy rates for these properties decreased to 1.5%, down 0.4 percentage points, thanks in part to the absorption of large vacancies in the waterfront areas. The demand for conveniently located buildings remains strong, leading to an interesting shift as demand begins to spill into less accessible areas.

C Class Buildings

Rents for Class C buildings increased by 353 yen to 19,854 yen per tsubo in Q4 2025, marking five consecutive quarters of gradual growth. The vacancy rate experienced a mild decline, landing at 2.2%, as demand surged in locations like Minato Ward, where expansions of branch offices helped absorb available space. This series of improvements indicates a steady trend since peaking at 5.0% during the third quarter of 2022.

Year-over-Year Changes Comparison

The comparison with Q4 2024 shows a significant uptick in rent dynamics:

• - Class A Rents: Up by 24.6%
• - Class B Rents: Up by 9.7%
• - Class C Rents: Up by 9.7%

Both Class B and Class C have reported nine consecutive quarters of positive growth, showcasing the overall recovery of the market.

About Sanko Estate Co., Ltd.

Founded on May 17, 1977, Sanko Estate Co., Ltd. provides comprehensive support for corporate office strategies. They assist in selecting rental office buildings, verifying and proposing optimal workplaces, and managing projects to address various office-related needs. More information can be accessed on their website: Sanko Estate.

Note: This release is for informational purposes and while great care has been taken, it does not guarantee accuracy. Use of this information is at the user's responsibility.