Office Rents on the Rise in Japan!? - Latest Trends Show Why Now Is the Time to Choose Rental Offices
For companies leasing offices in Tokyo, cost is a major issue that cannot be avoided. Especially in the district of central Tokyo, where rents continue to rise, this is a major burden not only for large companies, but also for small and medium-sized businesses and start-ups. Under these circumstances, shared offices and rental offices are attracting the attention of companies looking for convenience and flexibility while keeping costs low.
We will explain the latest trends in the Tokyo rental office market, along with the appeal of cost-effective shared and rental offices.
Table of Contents
- Traditional office lease prices are rising in the post-COVID era!
- How should you choose an office in this circumstance?
- Trends in rental and shared offices
- Search for offices on "Rental Office Search"!
Traditional office lease prices are rising in the post-COVID era!
According to research by XYMAX Real Estate Institute Corporation (April 2024), the Tokyo 23 wards office market from January to March 2024 showed a decrease in vacancy rates and an increase in rents compared to the previous quarter.
Following the COVID pandemic in 2020, an increasing number of companies canceled their office leases, leading to a rise in vacancy rates and a decline in rents. However, after hitting a low, there are now signs of lease prices increasing again.
As of May 2024, while lease prices have not yet reached the peak levels seen in 2020 over the past decade, Tokyo’s office leasing market remains highly competitive. In prime locations, rents per tsubo (approximately 3.3 square meters) commonly exceed ¥20,000 to ¥30,000.
In particular, rents have surged in Tokyo’s popular office areas known as the “Central 5 Wards” — Chiyoda, Chuo, Minato, Shinjuku, and Shibuya wards.
How should you choose an office in this circumstance?
High initial costs and rents are a significant financial burden even for large corporations, leading to careful consideration when selecting an office. Particularly for small and medium-sized businesses and startups, considering options like "shared offices" or "rental offices" can help keep costs down while finding a workspace suited to business needs.
Cost-effective
Shared or rental offices tend to have lower initial costs and lower monthly rents compared to traditional office leases when accommodating the same number of people. In particular, as these offices often come fully equipped with office furniture and amenities, additional initial investment is frequently unnecessary.
Flexibility
Shared and rental offices typically offer flexible contract terms, with some rental offices available for just a few months. This flexibility makes it easy to scale office size according to business needs, which can be particularly advantageous for startups in growth phases.
Convenience and services
Shared and rental offices may include amenities such as reception services, meeting rooms, and business lounges, allowing even small offices to enjoy facilities comparable to those of larger companies.
Trends in Rental and Shared Offices
Following the COVID pandemic, a growing number of companies have adopted remote work and hybrid work (a combination of in-office and remote work), driving rapid growth in the rental and shared office market.
Introduction of IoT (Internet of Things)
Rental and shared offices are equipped with the latest technology. For instance, IoT-enabled smart office solutions allow real-time monitoring of office usage. In addition, reservation systems and security measures leveraging AI are also advancing.
Here are some rental offices with above features!
H1O Nishi-Shinjuku
Location: 8-1-2 Nishi-Shinjuku, Shinjuku-ku, Tokyo
Access: A 1-minute walk from Nishi-Shinjuku Station, Tokyo Metro Marunouchi Line; a 6-minute walk from Tochomae Station, Toei Oedo Line; and a 9-minute walk from Shinjuku Station, JR Yamanote Line, JR Chuo Main Line (Tokyo to Shiojiri), JR Chuo Line (Rapid), JR Chuo-Sobu Line, Utsunomiya Line (JR Tohoku Main Line), JR Saikyo Line, JR Narita Express, JR Shonan-Shinjuku Line, Keio Line, Odakyu Line (Odakyu Odawara Line), Tokyo Metro Marunouchi Line, Toei Oedo Line, and Toei Shinjuku Line.
"H1O Nishi-Shinjuku" is a high-grade office located just a 1-minute walk from Nishi-Shinjuku Station. It offers advanced security with a multi-layered security design and biometric authentication, as well as a high degree of customization to meet tenant needs. Additionally, it provides IoT-enabled services, including remote control of air conditioning and lighting and real-time monitoring of shared space occupancy.
Diversification of Coworking Spaces
The offerings of shared and rental offices are becoming increasingly diverse, with more spaces tailored to specific industries and sectors.
For example, there are spaces designed for the creative industries, spaces for technology startups, and spaces for legal professionals, each catering to the unique needs of its respective field.
Search for offices on "Rental Office Search"!
On "Rental Office Search," you can explore rental offices in various areas while comparing location, fees, and facilities. You can also rely on our professionals to suggest properties based on your budget and preferences, so please feel free to contact us!
