Office vacancies in Tokyo fell for a third straight month in May to the lowest in more than three years amid a lack of new supply and more space being taken up as companies expand, according to broker Miki Shoji Co.
The rate, a measurement of unoccupied space, fell to 8.3 percent last month from 8.5 percent in April, according to data released today by the closely held Tokyo-based office-brokerage company. The May rate was the lowest since January 2010 when it was at 8.25 percent.
The office market in Japan’s capital is improving as Prime Minister Shinzo Abe strives to end 15 years of deflation and boost the world’s third-largest economy with measures that include reviving the property industry, which has been struggling since an asset bubble bust two decades ago. New supply of office space in Tokyo this year, which is about 40 percent of 2012’s level, will put a floor under rents, according to broker DTZ.
“The improvement in the office vacancy rate was due to a lack of new supply,” Masahiro Mochizuki, an analyst at Credit Suisse Group AG in Tokyo, said. “We may see further declines in the vacancy rate, when the performance of corporations improves going forward.”
Abe, in a preview of the government’s economic growth strategy, said yesterday that he will set up strategic zones to allow construction of more high-rise buildings. Japan has been grappling with deflation that has caused companies and households to put off spending since the late 1990s, after asset prices collapsed.
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