Tokyo new office supply to hit a cyclical peak in 2025

Supply will be 50% higher than the 10-year average.

According to Cushman and Wakefield, new supply in Tokyo’s office market is forecast to hit a cyclical peak in 2025, tracking at around 50% above the 10-year historical average of 188,467 tsubo.

However, the supply wave is then expected to subside over the next three years, until the next historical peak expected in 2029.

Here’s more from Cushman and Wakefield:

Over the next twelve months, key deliveries include The Link Pillar North/ South (85,810/53,393 tsubo) in Shinagawa, Meiji Yasuda Seimei Shinjuku Building (20,627 tsubo), and the Blue Front Shibaura Tower S (83,167 tsubo).

Rising construction costs continue to add pressure to development margins. The office construction cost index has increased by 26.7%, or CAGR 4.8%, since September 2019.