Tokyo Office Vacancies Fall for 2nd Month Post Quake
(Corrects conversion to show it’s per tsubo in fifth paragraph.)
Tokyo’s office vacancy rate fell for a second straight month in May, signaling improvement in the property industry in the wake of the March 11 earthquake.
The measure of unoccupied office units in Tokyo fell to 8.88 percent in May from 8.92 percent a month earlier, Miki Shoji Co., a privately held office brokerage company, said in a report today. In March, the vacancy rate was a record 9.19 percent. Demand for buildings with favorable criteria such as newer offices is increasing, the Miki Shoji said in a report.
Office occupancies are recovering after reaching a record high in March when the magnitude-9 earthquake and ensuing tsunami led to the nation’s worst disaster since the World War II. The report may be the latest sign of an improvement in the nation’s property market after the nation’s housing starts unexpectedly rose in April, rebounding from a decline in March.
The Topix Real Estate Index (TPREAL) trimmed an earlier loss of as much as 1 percent to close down 0.6 percent at the 11 a.m. lunch break in Tokyo.
The average office rent in Tokyo’s five main business districts of Chiyoda, Chuo, Minato, Shinjuku and Shibuya fell to 17,400 yen ($217) per tsubo from April, Miki Shoji said. One tsubo, a standard measure of property area in Japan, is 3.3 square meters, or 35.5 square feet.
Longer Recovery
Construction companies broke ground on 0.3 percent more homes in April from a year earlier, Japan’s Ministry of Land, Infrastructure, Transport and Tourism said on May 31. Housing starts were expected to fall 3 percent, based on the median estimate of 25 economists in a Bloomberg News survey.
Even so, some analysts are expecting that the recovery in the office market may take longer because of a lack of demand.
“There is still not enough demand to absorb the large amounts of office space coming onto the market in 2011 and 2012,” Daisuke Fukushima, an analyst at Nomura Securities Co., said in a report dated yesterday. “We were cautious about prospects for office vacancy rates even before the earthquake struck, and it may have pushed back recovery expectations even further.”
To contact the reporters on this story: Kathleen Chu in Tokyo at kchu2@bloomberg.net; Katsuyo Kuwako in Tokyo at kkuwako@bloomberg.net
To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net
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