Business Sep. 15, 2008 - 07:39AM JST ( 2 )

TOKYO —

The office vacancy rate in central Tokyo has been edging up, signaling falling demand for office space among Japanese companies amid the economy’s slowdown. According to major real estate broker Miki Shoji Co, the vacancy rate in five busy wards in Tokyo—Chiyoda, Chuo, Minato, Shinjuku and Shibuya—stood at 3.75% at the end of July, up 0.26 percentage point from a month before.

The rate rose for the sixth straight month although it still remained below the boom-or-bust dividing line of 5%.

The office vacancy rate has also been on the rise in Osaka and Nagoya, both major Japanese cities, Miki Shoji said.
Real estate market research firm Ikoma Data Service System said that the vacancy rate for the five wards in Tokyo rose for 10 consecutive months through June although it edged down 0.2 of a point in July.

According to real estate broker Building Kikaku Co, the end-July vacancy rate was up 0.11 of a point from a month before at 3.24%, climbing for the fifth straight month. Japanese companies have started to reduce their office space amid the economy’s stagnation, a source in the real estate industry said.

The industry is paying close attention to whether office rents in central Tokyo, which hover at high levels, will begin to fall in earnest.

JCN