Tokyo Outer Wards Attracting Office Demand

As rents rise and offices become harder to find in Tokyo’s central business districts, some tenants are seemingly evacuating to the metropolis’ outer flanks.

Vacancy rates in Tokyo’s non-core areas, made up of 18 outer wards, were down 1.8 percent year-over-year in the first quarter of 2025, The World Property Journal reported, citing CBRE data. At the same time, the five central wards saw a smaller decrease in vacancy of 1.2 percent over the same period.

Overall, vacancy was still higher in the outer districts at 5.8 percent compared to 2.4 percent in the urban core, but the CBRE report reflects the growing demand for office space outside the traditional business hotspots of the central districts.

The Tokyo South and Tokyo East areas saw the biggest drops in vacancy at 2.8 and 2.3 percent, respectively. That places them at the top of the list of the city’s 13 most active submarkets.

It might have to do with the shrinking number of large office spaces in the middle of town. Vacancy for units between 3,000 and 9,999 tsubo (106,750 to 355,796 square feet) has dropped below 2 percent, while offices 10,000 tsubo (355,831 square feet) and larger are just a little more available at 2.4 percent, per CBRE.

Because there’s little inventory for tenants to take advantage of, asking rents have increased drastically, leading companies to look outside the urban center. Still, despite six consecutive quarters of rent increases in the non-core districts, those areas overall remain more affordable than those in the heart of the city.

These peripheral markets are also becoming hotspots for specialized facilities that often have unique infrastructure features like reinforced flooring, higher ceiling or open layouts. The structures range from research and development centers to studios, showrooms and test kitchens. Because it’s usually more expensive to have these properties in the core areas, the non-core areas have become an increasingly attractive option to maintain operational efficiency and cost control.

Meanwhile, the opening of new buildings in central Tokyo are being delayed in part due to rising material costs and related construction delays. As a result, properties built more than five years ago in the outer wards are no longer viewed as backup options for offices.

— Chris Malone Méndez