Tokyo office market started the year on the right foot: analyst

A stellar performance is expected throughout 2025.

The Tokyo office market has continued on its path of growth in Q1/2025, and Savills said market sentiment is positive for the present year despite the large amount of supply coming to the market.

“Over the past multiple quarters, rents have risen and vacancy rates have tightened, and signs point to strong demand and uptake overall, although there are some offices in the market, many of which tend to be more aged and in locations with poorer accessibility, that are still treading water. Nonetheless, a closer look at market dynamics suggests that strategic asset management could improve the value of the property, attracting tenants and strengthening rents,” the analyst said.

Here’s more from Savills:

A large amount of supply is forecast this year, which was previously expected to have an adverse effect on the market due to its sheer volume. However, the strong demand for quality offices in the current environment has come to surpass expectations, and a significant proportion of the 2025 supply is reportedly already pre-leased.

As such, the office market looks to have started the new year on the right foot, and is expected to continue performing well throughout the year. Amid the current ultra-tight environment, large tenants are generally only able to find available space in new office buildings. These underlying conditions likely have led prospective tenants to feel a sense of scarcity, and will likely lead to further growth of the office market.