Tokyo office rents set to surpass pre-pandemic levels in 2026

The overall outlook remains firm through 2028.

The Tokyo office market across the Central Five Wards (C5W) is expected to remain on a solid growth trajectory, with both rents and occupancy approaching—and likely surpassing—pre-pandemic levels in 2026, according to the latest outlook from Savills.

Savills attributes the positive outlook to sustained tenant demand alongside diminishing availability of high-grade office space, particularly in newly delivered and premium-grade buildings.

Premium and New Stock to Lead Rental Growth

In the near term, Savills expects rental growth to remain strongest for newly completed and top-tier office assets, where competition for space continues to intensify. Tight supply in these segments is expected to support further upward pressure on rents through 2026.

By contrast, Savills notes that older office buildings may experience more muted rental growth unless landlords take proactive steps to enhance asset quality. Renovation and refurbishment—particularly of common areas—are seen as increasingly important for older assets seeking to remain competitive in a market that continues to favour modern, high-specification workplaces.

Inflation-Linked Leases Could Reshape Rental Dynamics

Savills highlights that inflation-linked office leases are expected to begin emerging in Tokyo from 2026, potentially introducing a new framework for sustainable long-term rental growth. Such leases would allow rents to adjust gradually in line with inflation, helping to smooth rental movements and reduce the likelihood of sharp increases at renewal.

However, Savills cautions that this leasing model remains experimental, with several unresolved considerations. These include the timing of rental adjustments, the selection of appropriate inflation indices, and potential accounting and administrative complexities for both landlords and tenants.

Moderate Supply to Support Tight Conditions Through 2028

Looking ahead, Savills expects moderate levels of new office supply through 2028, which, when combined with robust occupier demand, should keep the supply–demand balance tight over the medium term. This environment is expected to continue supporting rental growth and healthy pre-leasing activity.

While a record volume of new supply is scheduled for completion in 2029, Savills notes that tenant demand for projects delivering through that year remains strong. Pre-leasing rents continue to show upward momentum, reflecting confidence in the longer-term fundamentals of the Tokyo office market.

Developers Show Confidence Ahead of 2029 Supply Peak

Savills also observes that in some cases, developers are deliberately delaying leasing activities, particularly for top-grade office buildings. This strategy reflects confidence in achieving higher rental levels by securing tenants closer to completion, as demand for high-quality office space remains resilient.

Overall, Savills concludes that the Tokyo office market is well-positioned for continued growth, underpinned by strong occupier demand, limited availability of premium space, and evolving leasing structures that may support more stable long-term rental performance.