Large-scale Grade B offices record robust growth across Central Tokyo

Average rents rose 11.8% in Q4.

Tokyo’s large-scale Grade B office market continues to post solid performance, recording growth broadly in line with the Grade A segment, according to the latest research from Savills.

Savills reports that average rents for large-scale Grade B offices rose by 2.2% quarter-on-quarter and 11.8% year-on-year, reaching JPY28,568 per tsubo in Q4 2025. The sustained rental uplift reflects strong occupier demand amid a constrained supply environment, particularly as availability in the Grade A market remains limited.

Minato Leads Quarterly Rental Growth

According to Savills, Minato Ward recorded the strongest quarterly rental growth among the central wards, with rents rising 3.2% quarter-on-quarter. All other wards also posted rental increases over the quarter, ranging from 1.3% to 2.7%, underscoring the broad-based strength of the large-scale Grade B market.

Savills notes that the limited availability of Grade A office stock has pushed some occupier demand toward large-scale Grade B assets, supporting rental growth across the segment.

Vacancy Rates Continue to Improve

Savills highlights a continued tightening of vacancy conditions in the large-scale Grade B market. Average vacancy fell by 0.4 percentage points quarter-on-quarter and 1.5 percentage points year-on-year to 1.1% in Q4 2025, indicating strong absorption.

Chuo and Shinjuku saw the most significant quarterly improvement, with vacancy rates declining by 1.1 percentage points in each ward, according to Savills. Minato also recorded a modest improvement, with vacancy decreasing by 0.2 percentage points quarter-on-quarter. By contrast, Chiyoda and Shibuya experienced a marginal quarterly uptick of 0.1 percentage points, though vacancy levels remain relatively low overall.

Grade B Outperforms as Grade A Options Dwindle

Savills observes that, amid the continued scarcity of Grade A office space, the large-scale Grade B segment is outperforming Grade A offices in terms of rental growth. This trend is expected to persist as tenants seek high-quality alternatives in well-located buildings.

Looking ahead, Savills expects demand for large-scale Grade B offices to remain strong. Elevated construction costs are likely to constrain future supply additions, further tightening the demand–supply balance and supporting rental levels over the medium term.