Will the large influx of new supply in 2025 disrupt Tokyo’s office market? 

The supply is expected to be greater than that of 2023.

According to a recent report from Savills, the strength of Tokyo’s office market will be tested by the large influx of supply in 2025, which will be even larger than that of 2023. The Takanawa submarket will receive a large amount of attention, given the anticipated TAKANAWA GATEWAY CITY project slated for completion from 2025. 

The first stage of the project, THE LINKPILLAR I will reportedly be completed in early 2025, delivering a GFA of over 100,000 tsubo. 

Here’s more from Savills:

Overall, the development has attracted firm attention from prospective tenants, with KDDI taking a notably large lease of around 30,000 tsubo, and there are rumours that the development is well over half filled already. 

The mixed-use scheme will feature office space, retail and residential units, in addition to an international school, which will likely be appealing to corporations and high networth individuals. These mixed-use features should make office portions more attractive.

Other large-scale completions in 2025 appear to be widely spread across the Tokyo market. The Yaesu 1-Chome project in the Nihonbashi & Yaesu submarket will deliver among the largest volumes of new office space in 2025, albeit having faced a temporary pause in construction due to an onsite accident, which is rumoured to potentially delay the project until 2026. The scheme has received firm pre-leasing interest already, and the developer Tokyo Tatemono is rumoured to take up a large amount of space in the property. 

Meanwhile, Shibaura 1-Chome Project South will be another sizeable addition in the Shibaura & Hamamatsucho submarket, and is reportedly already mostly pre-leased. This may be attributed to its close proximity to the station, with a walkway being installed to aid easy commuting and access. Overall, the supply in 2025 should be well received, and is not expected to be overtly disruptive to the market.