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Overview of Large Office Supply Trends in Tokyo

Mori Trust Co., Ltd. has published an insightful report detailing the supply of large office buildings in Tokyo’s 23 wards for the year 2026. This analysis is part of an ongoing survey that has been conducted since 1986, which also now includes medium-sized office supplies initiated in 2013.

Survey Scope

The report covers a range of large office buildings, defined as those with a floor area of 10,000 square meters or more, and medium-sized offices from 5,000 to under 10,000 square meters. Buildings with mixed purposes, such as retail, residential, or hotels, are categorized based on their office-use floor areas only.

Supply Trends (As of December 2025)

1. Trends in Supply Volume:
According to the data, the supply volume for large office buildings in the 23 wards of Tokyo reached 1.13 million square meters in 2025, marking a 176% increase from the previous year. Looking ahead, the average supply volume over the next five years is expected to be around 870,000 square meters, which is 77% of the average from the past two decades. The forecasts for 2026 and 2029 suggest a continuation of supply at similar levels.

2. Geographical Distribution:
The next five years are forecasted to see an increased concentration of supply in Tokyo's central three districts (Chiyoda, Chuo, Minato), particularly in Chiyoda and Chuo. Recent deliveries have been concentrated in areas like Toranomon, Shimbashi, and Yaesu. However, new developing areas will also emerge, including Nagatacho, Nishi-Shinjuku, and Aoyama, indicating a diversification of development sites.

3. Trends by Development Land:
Notably, the supply from 'low or unused land (redevelopments)' in the central districts has risen significantly, from 30% between 2016-2020 to 70% from 2026-2030, indicating a shift in the primary development land source from reconstruction to property redevelopment.

4. Medium-sized Office Supply Trends:
Medium-sized offices saw a supply volume of approximately 99,000 square meters in 2025, matching the average supply of the past decade. For 2026, a reduction to about 44,000 square meters is anticipated, with a projection of 66,000 square meters as an average over the next two years due to ongoing market adjustments. However, a recovery is expected in 2027 where numbers could rise to 88,000 square meters.

Summary of Market Dynamics

The overall market dynamics indicate a trend toward supply restrictions and an expedited absorption of vacancies. The supply in 2025 saw significant volumes exceeding 1 million square meters. While the projections for 2026 and 2029 suggest similar trends, the average supply over the following five years is expected to be less than the average from the past 20 years, establishing a general trend of supply restraint.

This limitation in supply can be attributed to factors like escalating construction costs, prolonged construction timelines, and project reevaluations. The rising construction expenses are driven by structural challenges including labor shortages, indicating further stasis in drastic supplier expansions in the future.

However, demand remains robust with significant activity in tenant agreements. The occupancy rate for new buildings constructed in 2025 reached nearly 90%, with a solid outlook of approximately 80% for those expected to complete in 2026. Such trends suggest strong tenant demand continues to drive market progress, confirmed by a smooth absorption of existing vacancies even amid high supply periods.

The increasing tenant demand is bolstered by a re-emphasis on the value of in-person communications post-COVID, leading companies to increase office space for improved collaborative efforts. The ongoing battle for talent has led more firms to see high-quality office spaces as essential investments for growth, accelerating the move to newer premises.

As occupancy rates and rental prices trend upward consistently, the immediate market outlook appears stable, while the supply restraints, adjusted to external influences, assert a low risk of oversupply in the coming years.

Enhancement of Existing Property Values

With new supplies becoming limited, existing properties have gained relative importance within the market. Recent constructions consistently uphold high standards comparable to new buildings, keeping their competitiveness alive. Renovated older properties also gain significance as they respond to tenant demands for high-value spaces in an evolving office landscape.

Interestingly, we have started to observe deviations from historical patterns between occupancy rates and rental prices among some properties. Unlike past trends where rent escalated only after reaching close-to-full occupancy, it is not uncommon to see increases at various occupancy levels, particularly among new constructions. This shift may indicate changing phases in Tokyo's commercial real estate market, suggesting that landlords are starting to prioritize rental standards over mere occupancy rates.

For further insights and details, you can access the complete report through the provided link: Mori Trust 2026 Report.

About Mori Trust Co., Ltd.

Mori Trust Co., Ltd., headquartered in Minato, Tokyo, is a leading real estate developer specializing in large-scale urban developments and nationwide hotel and resort businesses. Focused on real estate, hotel & resort services, and investment activities, they oversee 52 buildings, residential and commercial facilities, as of March 2025, and operate 36 hotel and resort locations by March 2026. Mori Trust is committed to enhancing Japan's international competitiveness through urban development and the thoughtful utilization of historical structures in hospitality.