Vacancy rates in Tokyo office space fell again in September, marking the lowest level in four years.
Broker Miki Shoji Co. confirmed the 0.26 per cent fall, from 8.16 per cent in August to 7.9 per cent in September. A level as low hasn’t recorded since October 2009.
Confidence in Tokyo’s office market is improving, with large business investors take advantage of Prime Minister Shinzo Abe’s economy-boosting stimulus ahead of the consumption tax increase scheduled for April 2014.
“The vacancy rate was better than I had expected,” said Daisuke Fukushima, an analyst at Nomura Securities Co. who had predicted the rate would decline to 8 percent. “Economic sentiment is improving and that has had a positive impact on the office market.”
The value of the yen decreased over the course of 2013, with the Bank of Japan pumping $404 billion into the financial systems. This, in turn, boosting exports and the country’s banking industry.
“We expect the Bank of Japan’s monetary easing to produce the desired effects and look for increases in government spending and public works investment to continue through 2015,” Masahiro Mochizuki, an analyst at Credit Suisse, wrote in a research note Monday.
“Under this scenario, strong demand for office space should drive down vacancy rates in Tokyo’s five central wards from now through 2015.”
Flexible Tokyo office space remains a viable solution for businesses wishing to take advantage of the current strong economy.