Tokyo Grade A office rents up 10.7% in Q4

All five core wards recorded rental growth over the quarter.

The Tokyo Grade A office market continues to demonstrate strong momentum, supported by solid economic growth and healthy corporate profits, according to the latest research from Savills.

Savills reports that average Grade A office rents across Tokyo’s Central Five Wards (C5W) rose by 1.9% quarter-on-quarter and 10.7% year-on-year, reaching JPY37,586 per tsubo in Q4 2025. All five core wards recorded rental growth over the quarter, underlining the broad-based strength of the market.

Shinjuku Leads Rental Growth Across the C5W

According to Savills, Shinjuku emerged as the standout performer, delivering the strongest rental growth on both a quarterly and annual basis. Meanwhile, other major wards—including Chiyoda, Minato, Chuo, and Shibuya—also posted positive rental movements, reflecting sustained tenant demand for high-quality office space in central locations.

Vacancy Rates Near Historic Lows

Savills notes that the average Grade A office vacancy rate across the C5W fell by 0.1 percentage points quarter-on-quarter to just 0.4%, highlighting exceptionally tight market conditions.

Vacancy levels in Shibuya, Chiyoda, and Shinjuku are now approaching zero, yet these areas continue to record rental growth—an indication, Savills says, of strong underlying tenant demand. Chuo Ward saw a notable improvement in vacancy on both a quarterly and annual basis, driven by strong absorption in bay-area locations. In Minato, vacancy remained flat quarter-on-quarter but showed marked improvement year-on-year, according to Savills.

Prime Locations and Amenities Drive Tenant Demand

Savills highlights that the proportion of flexible work arrangements in Tokyo has remained broadly stable over the past two years. At the same time, ongoing labour shortages have increased the strategic importance of offices in prime, well-connected locations, which are better positioned to attract and retain talent.

As a result, Savills observes rising demand for modern office buildings designed to support diverse workstyles. Features such as phone booths, ample meeting rooms equipped for video conferencing, and layouts that accommodate both collaboration and focus work are increasingly sought after by tenants.

In addition, Savills points out that buildings offering amenity-rich environments—including lounges and affordable staff cafeterias—tend to enhance employee satisfaction, improving tenant retention and supporting prospects for further rental growth.

New Supply to Remain Manageable Until 2029

Looking ahead, Savills expects new office supply in 2026 to be broadly in line with 2025 levels, with around half of new completions concentrated in the Nihonbashi and Yaesu submarket. Completions in 2027 and 2028 are projected to fall below 2026 levels, which Savills believes will support healthy absorption and keep vacancy rates tight in the interim.

While a record level of new supply is anticipated in 2029, Savills notes that robust pre-leasing demand is already evident for upcoming developments, reflecting continued strong appetite for modern, amenity-rich Grade A office space in Tokyo.