Tokyo office rents have climbed to their highest level in 18 years as Japan’s office market continues to tighten, according to a new report from CBRE. In the third quarter of 2025, vacancies fell in half of Japan’s major cities, highlighting strong tenant demand across regional hubs like Yokohama, Fukuoka, and Tokyo. The data underscores how Japan’s office sector—unlike many global markets—remains resilient, with companies still expanding and upgrading their workspaces.
Vacancy Rates Decline Across Major Markets
Vacancies declined quarter-over-quarter in five of ten key cities, held steady in two, and rose in only three. Yokohama led the improvements, with the vacancy rate falling by one percentage point to 4.3%, driven by relocations and steady demand for new offices. Fukuoka followed closely with a 0.6-point drop to 4.0%, supported by expansions and temporary relocations due to building redevelopments—signals of robust leasing momentum.
Cities that saw vacancies rise—such as Sapporo, Kanazawa, and Kyoto—were primarily affected by new supply entering the market rather than weaker demand. For example, Kanazawa’s vacancy rate increased 1.5 points as new inventory briefly outpaced tenant take-up.
Rents Climb in Nearly Every Market
Office rents rose in nine of ten surveyed cities, with Yokohama, Sendai, and Takamatsu leading the charge at over 1% quarter-over-quarter growth. CBRE noted that “almost no properties reported lower rents nationwide,” with several cities—including Sapporo, Saitama, and Hiroshima—setting new all-time highs.
Tokyo Tightens Further as Rents Surge to 18-Year High
In Tokyo, conditions remain exceptionally tight. The all-grade vacancy rate dropped 0.4 points to 2.1%, while Grade A vacancies fell to just 1.0%. Strong competition for premium space drove Tokyo office rents up 3.4% to about $1,075 per tsubo—the highest since 2007 and above pre-pandemic peaks. CBRE said demand for large, high-quality floor plates in central Tokyo remains “exceptionally strong,” with landlords maintaining firm pricing power.
Osaka and Nagoya Set New Records
Osaka’s all-grade vacancy rate dipped to 2.3%, with rents hitting a record $400 per tsubo. Nagoya saw similar strength: vacancies fell to 2.4%, and Grade A rents climbed 1.4% to $765 per tsubo—both the strongest readings since CBRE began tracking the data.
Market Outlook
CBRE described Japan’s office sector as showing “remarkable stability” due to steady tenant demand, limited speculative construction, and continued expansion activity. While new supply may create temporary fluctuations in select secondary markets, fundamentals in Tokyo and other major metros remain solid heading into 2026.
