Tokyo Office Vacancy Rate Drops to 1.5% Amid Corporate Return-to-Office Push
Tokyo’s office vacancy rate fell to 1.5% in the first quarter of the year, marking the lowest level among major global cities. According to PropertyMore, the decline stems from Japanese companies increasingly bringing employees back to physical workspaces.
The Bottom Line
- Tightness: Tokyo’s overall vacancy fell to 1.5%, while CBRE data shows Grade A space in key wards tightened to 1.4% year-on-year.
- Driving Forces: A strong corporate preference for face-to-face communication, business expansions, and slower automation adoption fuel demand.
- Rent Inflation: Average rents continue an upward trajectory, with Grade A spaces in Tokyo averaging ¥38,450 per tsubo.
CBRE Data Unveils Grade A Tightness Across Japanese Metros
Market data compiled by CBRE Co., Ltd. highlights the depth of this commercial real estate compression. In a survey covering 13 major Japanese cities, CBRE reported that Tokyo’s all-grade vacancy rate dropped to 2.5% during Q2 2025. New supply held steady at 41,000 tsubo, while new demand reached 83,000 tsubo, according to reports from wa-mare.com citing the Real Estate Distribution Research Institute.
Demand outpaced supply. This imbalance was driven by corporate relocations for upgrades, branch openings, and floor expansions across a wide range of industries. The Grade A office vacancy rate dropped 2.2 percentage points year-on-year to 1.4%, sliding below the 2% threshold for the first time since Q2 2021.
| Region / Grade | Vacancy Rate | YoY Change | Average Rent (Per Tsubo) |
|---|---|---|---|
| Tokyo (All Grades) | 2.5% | -0.5 pts (QoQ) | ¥22,310 (Up 1.2%) |
| Tokyo Grade A | 1.4% | -2.2 pts (YoY) | ¥38,450 (Up 2.7%) |
| Osaka (All Grades) | 2.6% | Stable | ¥14,550 (Up 0.9%) |
| Nagoya Grade A | 1.4% | -0.9 pts (YoY) | ¥14,270 (Up 0.9%) |
Cultural Realities and Slower AI Adoption Shape Workplace Demand
Japanese enterprises prioritize physical collocation. PropertyMore notes that a slower take-up of AI drives demand, as companies in Tokyo value face-to-face communication at the workplace.
Corporate leaders in Tokyo view face-to-face communication as a core operational necessity. Consequently, companies are bringing employees back to work alongside their colleagues.
National Spread and Upward Pressure on Rents
The tightening commercial footprint is not restricted to the capital. In Nagoya, the Grade A vacancy rate reached 1.4%, declining 0.9 percentage points year-on-year. Meanwhile, Osaka maintained an all-grade vacancy rate of 2.6% while posting its fourth consecutive quarter of rent increases across all grades.
Among 10 regional cities, rents rose in all 10, reflecting a nationwide upward trend.
Market Implications and Future Trajectory
Disclaimer: The information provided in this article is for educational and informational purposes only and does not constitute financial advice.
