Tokyo office supply expected to dip below 2025 levels in 2026

Tight vacancy and limited supply will support the city’s office rental momentum.

The C5W Tokyo office market continues to demonstrate strong underlying momentum, with both Grade A and large-scale Grade B rents in Q1 2026 surpassing their previous 2020 peak levels, according to Savills.

In its latest outlook, Savills noted that vacancy rates remain exceptionally tight, with some wards approaching pre-pandemic lows. This reflects sustained occupier demand alongside limited availability, particularly for large floorplate requirements, which are increasingly difficult to secure within core districts.

New office supply in 2026 is expected to fall slightly below 2025 levels, with further declines projected in 2027 and 2028. At the same time, elevated construction and land costs are likely to delay or even cancel some planned developments, further constraining future supply.

Strong pre-leasing activity has already been recorded at major projects such as TOFROM YAESU TOWER, underscoring robust demand for high-quality, large-scale office space, according to Savills. This is expected to support continued tightness in the market, while pushing some tenants unable to secure core space to consider alternatives such as the Tokyo Bay Area.

Looking ahead, Savills said the positive trajectory of the Tokyo office market is expected to continue through 2026. Strong corporate profitability, expansion-driven demand and constrained new supply are likely to keep conditions tight, while the growing adoption of inflation-linked leases may further support rental growth in an environment where inflation remains persistent in Japan.