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Tokyo office rents seen falling as supply glut tilts balance

While office space mounts, government expects Tokyo's workforce to decline as population shrinks

Tokyo

COMMERCIAL property prices in Tokyo, a bellwether for Japan's market, look to have peaked as the capital faces a glut of new offices even as the number of office workers is set to decline.

The property market had rebounded in the past three years as Prime Minister Shinzo Abe's economic policies, with ultra-low interest rates, drew in investors attracted by the wider gap than in other developed markets between returns on property and borrowing costs.

Also, as Japanese companies regained confidence, they sought more space, helping drive down office vacancy rates in the capital. Rents have been rising since 2014.

But office rents are now expected to start falling as early as next year as new space...

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