OFFICE RENTDATA 2019 Tokyo Redevelopment Projects

OFFICE RENTDATA 2019

Tokyo Redevelopment Projects

OFFICE RENTDATA 2019

March 2019 Published by Sanko Estate Co., Ltd. Ginza Sanwa Bldg., 4-6-1 Ginza, Chuo-ku, Tokyo

Only environmentally-friendly, zero-VOC （Volatile organic compounds）100% vegetable oil inks were used in the printing of this report.

01-02 Aerial Photo 11-12 Transition in Office Rents and Economic Trends

03-04 Redevelopment Report 13-16 Office Market

05-06 Redevelopment Map 17-22 Guidelines for Opening an Office

07-08 Completion Timeline 23-24 Special Report

09-10 New Supply 25-26 Company Outline

Midtown Tower

Sumitomo Fudosan Roppongi Grand Tower

Toranomon Hills Mori Tower

The Okura Prestige Tower Kasumigaseki Building Toranomon Hills Ark Hills Sengokuyama Mori Tower Business Tower P3

Kamiyacho Trust Tower P4 Atago Green Hills Mori Tower

Toranomon～Roppongi

Atago Shrine

Kamiyacho Sta. Tokyo Tower Onarimon Sta. Shiba Park Kyu Shiba Rikyu GardenGarderderdd n

Date: October 21,, 2018 AAltitude:ltitude: approx.approx. 450 m

01 SANKO ESTATE SANKO ESTATE 02 Redevelopment Report *The renderings below are for illustrative purposes only and are subject to change.

Accelerating Redevelopment to $7RZHU6\PEROL]LQJ.DPL\DFKR·V7UDQVIRUPDWLRQ Tokyo Establish a Global Business Hub Tokyo into a Global, Creative Area That Generates New Value Toranomon Hills Business Tower Kamiyacho Trust Tower

Forming a Community around an area where the projects are located. tors from a wide range of fields includ- A Hub Serving as a Gateway Linking premium luxury hotel brand, Integrated Redevelopment Project Following Toranomon Hills Mori Tower, ing entrepreneurs, new business man- the World to Both Tokyo and Japan and Mori Trust has succeed- completed in June 2014, development agers at large companies to corporate ed in bringing it to Japan for Mori Building Co., Ltd. completed will continue with the buildings provi- executives. Its goal is to support the Mori Trust Co., Ltd., a major developer the first time. Toranomon Hills Mori Tower in 2014 sionally named Toranomon Hills Busi- creation of new business through based in Toranomon, Minato Ward, is The building will have a total with an aim to enhance and evolve the ness Tower, Toranomon Hills Residen- exchange and nurturing. moving forward with the development of 28 office floors, from the Toranomon area. It is now being tial Tower (Tentative Name), and Torano- of a new landmark that will symbolize third to the 30th floor, with an expanded with the construction of mon Hills Station Tower (Tentative Name). Forming a Community Tokyo’s status as an international city. average area of around 1,160 another three buildings on a neighbor- That Combines Diverse Elements The project site occupies a prime loca- tsubo [3,828 ㎡]. The large, ing site. Once completed, the company 3URMHFW·V.H\)HDWXUHLVWKH2SHQLQJ tion directly connected to Kamiyacho column-free floor plate aims for the four-building complex to of an Innovation Center The next building is Toranomon Hills Station on the Tokyo Metro Hibiya Line. accommodates the needs of form the hub of a new community. Residential Tower (Tentative name), It will be an integrated redevelopment tenants who wish to consoli- Toranomon Hills Business Tower is tentatively scheduled for completion in project centering on the former site of date offices that are divided Large-Scale Multi-Use Development Projectscheduled for completion in December January 2021. At about 220 meters Pastoral Toranomon, a hotel facility that between multiple floors or Driven by a Combination of Factors 2019. The building will be around 185 high, with 54 aboveground floors, this was owned by the Mutual Aid Associa- buildings in a single location. meters high, with 36 aboveground building is expected to become tion of Agriculture, Forestry and Fishery Moreover, all offices will fea- The new large-scale, three-building floors, three underground floors, and Japan’s tallest residential building. It Corporation Personnel. ture state-of-the-art specifica- development was announced in April three penthouse floors. The ground will house around 550 residential units, Before construction began, it was pro- tions, including LED lighting, 2016, following the completion of floor will house a bus terminal. Com- along with amenities such as a mem- visionally named the Toranomon high ceilings (2,900 mm) that Toranomon Hills Mori Tower. Mori mercial facilities will occupy the third bers-only spa and childcare support Yon-chome Project. In March 2015, it create an open, spacious Ground-level view of exterior Image courtesy of Mori Trust Co., Ltd. Building has frequently pursued rede- floor to the first basement floor, while facilities. The aim is to create an was accredited as the first Architecture feel, raised floors (150 mm), velopments incorporating the so-called there will be an innovation center on appealing community that leverages Remodeling Project for National Strate- and a standard floor load of 500 kg/㎡ “number buildings” that it developed in the fourth floor and offices on the fifth the distinctive features of the Torano- gic Urban Planning designated by the (1,000 kg/㎡ in heavy-duty zones). building will have high-capacity gener- the past, and both of these projects to 36th floors. mon area. Cabinet Office, and it also received Each floor will also have interior ation equipment that can cover up to were boosted by the combination of At the bus terminal, users will be able After that, Toranomon Hills Station accreditation as a National Strategic air-conditioning enabling the tempera- about 80% of regular power needs. various factors, including Tokyo’s to board the BRT (bus rapid transit Tower (Tentative name) is scheduled Private Sector Urban Renaissance Proj- ture to be controlled within 72 different Another distinctive feature of Kamiya- selection as host of the 2020 Olympic system) under development by the for completion in February 2023. Since ect. Upon the start of construction in zones of approximately 50 ㎡ each, cho Trust Tower is that about half of the Games, the plan to open a new station Tokyo metropolitan government, which this project will be integrated with October 2016, it was decided to name while the perimeter areas will be office floors (the 14 floors from the third on the Tokyo Metro Hibiya Line, and is expected to provide a transport link Toranomon Hills Station on the Tokyo the project “Tokyo World Gate,” signify- equipped with 58 individual air-condi- to 16th floor) will serve as “creative the new establishment of the National to the Tokyo waterfront. Access by car Metro Hibiya Line, it will be highly ing its role as a gateway linking the tioning units per floor plus natural air floors.” Based on the project’s “Cre- Strategic Special Zone system. These should improve substantially once accessible. The mixed-use building will world to both Tokyo and Japan. vents. ative First” vision for office work, they have led to a rapid increase in momen- Loop Road No. 2 is fully open. Assum- house offices, a hotel, and commercial Flap barriers will be installed on first will be equipped with unique interior tum for new urban development in the ing the building is served by Airport facilities, along with a business promo- Supporting Innovative underground floor to the second abo- specifications combining a high level of Limousine tion center on the top floor with an aim Office Development veground floor, providing strict securi- flexibility with cost savings, specialized Buses, Haneda of becoming a hub of new business ty. Thorough BCP measures will also common areas designed to enhance Airport will also and innovation accessible to large The main building of this project, Kami- be taken, including the use of a hybrid creativity for the entire floor, and opti- be readily companies, startups, entrepreneurs yacho Trust Tower will have 38 abo- damping system that will deliver vibra- mal and flexible security plans aligned accessible, and the public. veground floors and three underground tion suppression performance that is with open innovation needs. Kamiya- which means it With the addition of these three build- floors. Six floors (the 31st to 36th) will 1.5 times superior to that required for cho Trust Tower will therefore provide has the potential ings, Toranomon Hills will expand to a be occupied by Tokyo Edition Torano- standard high-rise buildings. In the exceptional support for the creation of to serve as a total site area of around 7.5 hectares, mon. Edition is Marriott International’s event of a prolonged power outage, the innovative office spaces. gateway to the around 240,000 tsubo [792,000 ㎡]of Tokyo area. total floor area (including 90,000 tsubo A key feature of [297,000 ㎡]of office space and 8,000 the project is the tsubo [26,500 ㎡] of commercial innovation space), and 4,500 tsubo [14,850 ㎡] of center to be green space. They will drive Torano- opened on the mon’s evolution into a new international fourth floor. This urban hub and global business center (Left) Rendering of office lobby Panoramic view of exterior facility will bring performing a wide range of functions. (Right) Rendering of retail space on Image courtesy of Mori Building Co., Ltd. together innova- lower floors

03 SANKO ESTATE SANKO ESTATE 04 Shin Nihombashi Redevelopment Map 1 Otemachi Place East Tower

OH-1 PRJ. 2 3 4 Otemachi Nihonbashi Muromachi

Her Britannic 3 Otemachi Mitsui Tower 4 Mitsukoshimae Majesty’s Otemachi 6

Tokyo Tokiwabashi Tower D Line Ueno 1 Route Embassy 2 H 6 Mandarin Oriental, Tokyo Imperial Expressway Metropolitan Yotsuya Mitsukoshimae Palace Otemachi 5 7 8 Shangri-La Hotel, Tokyo 7 H 8 Tokyo Tokiwabashi Tower A CHIYODA WARD Otemachi Hotel New Tokyo 9 Tokyo Tokiwabashi Tower B Otani Tokyo 10 Marunouchi 1-3 PRJ. 5 H 11 Nihombashi 12 14 Metropolitan Expressway Route 6 Mukojima Line 16 Tokyo Akasaka Goyouchi 15 13 Nihombashi

National Diet Building Nihombashi The Peninsula Tokyo 10 Kayabacho Tokyo H 9 Inner Circular Route 17 Nihombashi Metropolitan Expressway Yaesu 1chome East Takashimaya Area PRJ. Mitsui Bldg. Embassy of Canada Taiyo-seimei Nihombashi Bldg. Imperial Nijubashimae 11 Tameike-Sanno H Yaesu Akasaka Hotel 2chome Embassy of North Area PRJ. 14 Museum Tower Kyobashi Kayabacho United States Marunouchi Nijubashi Building 16 12 of America 18 20 ANA InterContinental Tokyo H 21 Tokyo CHUO WARD 15 Kyobashi 1chome The Ritz-Carlton, Tokyo East PRJ. B 19 H H Shimbashi 13 Hotel Okura Yaesu 2chome Center PRJ. Tokyo Hibiya Yurakucho Kyobashi 22 Roppongi 24 23 Ginza 1chome Embassy of the Russian Hibiya Hatchobori Yurakucho Kasumigaseki H Federation KK Line Hatchobori Grand Hyatt Tokyo Takaracho Embassy of the Republic H Tokyo Prince Hotel Hibiya Hamamatsucho 17 Tokyo Expressway of the Philippines Tokyo Tower Hibiya Mitsui Tower Embassy of the Republic 25 26 Ginza of Singapore 29 Embassy of the People's 27 Republic of China MINATO WARD Tameike-Sanno 28 30 Australian Embassy Embassy of the Republic of Korea Toranomon Embassy of Embassy of Italy 1 Kanda Nishikicho 2chome PRJ. the Federal Republic 2 OH-1 PRJ. of Germany Tamachi 3 Otemachi Place East Tower 4 Nihonbashi Muromachi Mitsui Tower 18 Toranomon 2chome PRJ. Sotobori Street Embassy of France 33 5 Marunouchi 1-3 PRJ. 31 Inner Circular Route 6 Tokyo Tokiwabashi Tower D Metropolitan Expressway Toranomon Hills 32 7 Tokyo Tokiwabashi Tower B Station Tower (Tentative name) 8 Tokyo Tokiwabashi Tower A 20 Toranomon Hills 9 Yaesu 1chome East Area PRJ. 21 Business Tower 10 Nihombashi Takashimaya Mitsui Bldg. 11 Taiyo-seimei Nihombashi Bldg. 12 Yaesu 2chome North Area PRJ. Toranomon Hills Station 13 Yaesu 2chome Center PRJ. 19 The Okura 14 Museum Tower Kyobashi Prestige Tower 15 Kyobashi 1chome East PRJ. B 16 Marunouchi Nijubashi Building 17 Hibiya Mitsui Tower 18 Toranomon 2chome PRJ. Grand Prince Hotel MetropolitanRoute 3 Shibuya Expressway Line Kamiyacho Trust Tower New Takanawa 19 The Okura Prestige Tower 22 H 20 Toranomon Hills Station Tower (Tentative name) 21 Toranomon Hills Business Tower 22 Kamiyacho Trust Tower Roppongi 1chome Shinagawa Prince Hotel H Shinagawa 23 Toranomon・Azabudai District Urban Redevelopment Area Sakurada street H The Strings By InterContinental Tokyo 24 Roppongi 5chome PRJ. 25 Nippon Life Hamamatsucho Crea Tower 26 World Trade Center Building (Tentative name) Toranomon・Azabudai District 27 Hamamatsucho 2chome PRJ. A-2 Urban Redevelopment Area 28 World Trade Center Building South Tower(Tentative name) 23 Kamiyacho 29 Takeshiba Waterfront Development Project 30 Takeshiba Area Development Project A 31 Mita 3-4chome PRJ. A Osaki 32 Tamachi Station Tower S 33 Tamachi Station Tower N 34 Sumitomo Fudosan Osaki Garden Tower

SHINAGAWA WARD Onarimon

05 SANKO ESTATE 34 SANKO ESTATE 06 Ikebukuro 9 1 tsubo ≒ 3.3 sq. m ≒ 35.58 sq. feet Completion Timeline - Abbreviations are used in some parts. - Scale refers to the number of floors above ground, TOSHIMA WARD (Large-scale Buildings in Major Areas) and one floor refers to the standard floor area in tsubo. - Building names, completion times, structure, etc. may change 4 depending on the progress of future work. 2019-2022 Current as of February 1, 2019

2019 Scale／1Floor 2020 Scale／1Floor BUNKYO WARD

1 Mar Nihonbashi Muromachi Mitsui Tower 26／1,309 1 Jan Yotsuya Ekimae Urban Redevelopment Project31／778 Ueno Park Chuo Ward / Nihombashi Muromachi3 Shinjuku Ward / Yotsuya1 Ueno 2 Mar Shibuya Solasta 21／546 2 Feb OH-1 PRJ.B 39／1,128 Shibuya Ward / Dogenzaka1 Chiyoda Ward / Otemachi1 5 3 Mar Sumitomo Fudosan Shibuya Tower 21／450 3 Feb Kanda Nishikicho 2chome PRJ. 21／885 Shibuya Ward / Udagawacho41 Chiyoda Ward / Kanda Nishikicho2 TAITO WARD

4 Apr Daiya Gate Ikebukuro 20／650 4 Mar Kamiyacho Trust Tower ⇒P4 Toshima Ward / Minami-Ikebukuro1 Minato Ward / Toranomon4 Iidabashi 5 Jun The Okura Prestige Tower 41／702 5 Mar Bunkyo Garden Gatetower 23／777 SHINJUKU WARD Akihabara Minato Ward / Toranomon2 Bunkyo Ward / Koishikawa1

6 Jun Sumitomo Fudosan Nishi-Shinjuku 6chome PRJ.34／442 6 Mar Takeshiba Waterfront Development Project 26／450 Shinjuku Ward / Nishi-Shinjuku6 Minato Ward / Kaigan1 6 3 7 Jun Museum Tower Kyobashi 23／397 7 Apr Toyosu Bayside Cross A (Tentative name) 36／1,022 Shinjuku Chuo Ward / Kyobashi1 Koto Ward / Toyosu2 1 CHIYODA WARD Shin-Nihombashi 8 Aug Shibuya Scramble Square 47／870 May Haneda Airport Zone 1 PRJ. 7／2,000 2 Shinjuku Shibuya Ward / Shibuya2 Ota Ward / Hanedakuko1 Yotsuya Imperial 1 Gyoen 13 Yoyogi 9 Palace 9 Aug Shinjuku Minamiguchi Project 16／563 8 May Takeshiba Area Development Project A 40／907 Shibuya Ward / Sendagaya5 Minato Ward / Kaigan1 10 Tokyo CHUO WARD

10 Sep Shibuya Fukuras 18／638 9 May Hareza Tower 33／504 Shibuya Ward / Dogenzaka1 Toshima Ward / Higashi Ikebukuro1 Akasaka Meijijingu 7 Goyouchi 11 Oct Udagawacho Area15 Development PRJ. 18／570 10 Jun Sumitomo Fudosan Kojimachi Garden Tower 22／529 Shibuya Ward / Udagawacho14,15 Chiyoda Ward / Kojimachi5 Yurakucho

12 Dec Toranomon Hills Business Tower ⇒P3 11 Jun Toranomon Station Front Office Building Project24／408 SHIBUYA Minato Ward / Toranomon1 Minato Ward / Toranomon1 WARD 11 12 Jul Tamachi Station Tower N 36／866 Shimbashi Minato Ward / Shibaura3 5 12

13 Sep Marunouchi 1-3 PRJ. 29／800 3 11 4 Chiyoda Ward / Marunouchi1 8 Hamarikyu 14 Oct Kita Shinagawa 5chome PRJ. ʠ 19／550 Shibuya Garden Shinagawa Ward / Kita-Shinagawa5 MINATO WARD Shiba Park

Feb 10 Hamamatsucho 7 Yokohama Grangate 19／1,429 2 6 Yokohama / Nishi Ward 8 Mar JR Yokohama Tower 26／311 Yokohama / Nishi Ward

Tamachi

2021Scale／1Floor 2022 Scale／1Floor 12

Mar World Trade Center Building South Tower (Tentative name) 39／514 Apr Tokyo Tokiwabashi Tower D 9／600 Minato Ward / Hamamatsucho2 Chiyoda Ward / Otemachi2 Mar Toyosu 6chome 4-2 Office PRJ. 11／2,000 Apr Shibuya Dogenzaka 2chome Development PRJ. 28／350 Koto Ward / Toyosu6 Shibuya Ward / Dogenzaka2 MEGURO WARD Meguro Mar Shimbashi Tamuracho Project 27／820 Jul Kudankaikan PRJ. 17／1,000 Minato Ward / Nishi-Shimbashi1 Chiyoda Ward / Kudanminami1 Mar Kabutocho PRJ. 15／570 Aug Yaesu 2chome North Area PRJ. 45／1,200 Shinagawa Chuo Ward / Nihombashi Kabutocho7 Chuo Ward / Yaesu2

Apr Tokyo Tokiwabashi Tower A 40／780 Aug Yanmar Tokyo Bldg. (Tentative name) 14／300 Chiyoda Ward / Otemachi2 Chuo Ward / Yaesu2 14 Mar Kawasaki Station West Exit PRJ. 29／800 Sep Nishi Shinjuku 5chome PRJ. North-A 35／600 Kawasaki / Saiwai Ward Shinjuku Ward / Nishi-Shinjuku5 Jul Yokohama Gate Tower Project 21／800 Dec Nakano 2chome PRJ. 20／700 Osaki Yokohama / Nishi Ward Nakano Ward / Nakano2 Oct Omiya Station East Exit PRJ. 18／411 Saitama / Omiya Ward Dec Ebina Station Office Project 14／562 SHINAGAWA WARD Ebina

07 SANKO ESTATE SANKO ESTATE 08 New Supply Tokyo

Abbreviations are used in some parts Change in Amount of New Supply Buildings of 100 tsubo (330 m²) or more per Floor 1 tsubo ≒ 3.3 sq. m ≒ 35.58 sq. feet Leasable Floor Area of 20,000 tsubo (66,000 m²) or more tsubo 400,000 ( )

1,322,314 m² 360,000 14,233,270 sq. ft Plans

Roppongi Hills 54,000tsubo

310,000

300,000 Shiodome City Kamiyacho 290,000 ( ) Center Trust Tower 32,000tsubo 280,000 280,000

991,735.5 m² 270,000 10,674,952.5 sq. ft Shinjuku Shinagawa Grand Eastside Central Tower Toranomon・ Midtown Square Otemachi OH-1PRJ.B 26,000tsubo Azabudai Tower 34,000tsubo Place West Tower District Urban 44,000tsubo 35,000tsubo Redevelopment Nakano Area 230,000 Takeshiba Area Central Development Park S Project A Akihabara Shin-Marunouchi 220,000 30,000tsubo Sumitomo Fudosan UDX Bldg. Bldg. Shinjuku Grand Osaki Garden Tower 32,000tsubo 24,000tsubo Tower 35,000tsubo Toyosu 200,000 200,000 200,000 28,000tsubo JP Tower 200,000 Bayside Cross A Hamamatsucho S 200,000 (Tentative name) ThinkPark 28,000tsubo Otemachi 661,157 m² Izumi Garden 190,000 190,000 190,000 Otemachi Place East 7,116,635 sq. ft Tower Tower Marunouchi ( ) Financial City Tower 180,000 26,000tsubo 180,000 Park Bldg. Toyosu 24,000tsubo Shinagawa Grand Cube Tamachi 31,000tsubo Front 24,000tsubo Toranomon Season 32,000tsubo Hills Station Triton Akasaka 21,000tsubo Tamachi Shiodome Terrace Business Tower Ｎ Square X Biz Station Bldg. 39,000tsubo Tower 24,000tsubo Tower Tower S 24,000tsubo Roppongi Mita 150,000 32,000tsubo 150,000 150,000 24,000tsubo 3・4-chome PRJ. Grand Tower Nihonbashi Marunouchi1-3 PRJ. Triton Muromachi Square Y Tokyo Tokyo 31,000tsubo Hibiya Mitsui GranTokyoS Mitsui Tower Shiodome Otemachi Toranomon Nihombashi Tower 22,000tsubo 23,000tsubo Tower Tower Bldg. Hills Tokyo 24,000tsubo 26,000tsubo 130,000 Shibuya 25,000tsubo 30,000tsubo 22,000tsubo Garden Scramble Akasaka Marunouchi Toranomon GranTokyoN Terrace Square Intercity Nijubashi Hills Station Tokyo Bldg. 21,000tsubo 24,000tsubo AIR Building Tower 23,000tsubo （Tentative name） Kyobashi 25,000tsubo 20,000tsubo Edogrand 100,000 20,000tsubo 330,578.5 m² 90,000 90,000 ( 3,558,317.5 sq. ft) Tokyo Tokiwabashi TTM PRJ. Tower A Yaesu 2chome North Area PRJ.

Toranomon 2chome PRJ.

0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

09 SANKO ESTATE SANKO ESTATE 10 Transition in Office Rents and Economic Trends ■Class A buildings in central Tokyo 2001-2019 Current as of December 10, 2018 Office Rent Index Vacancy rate Real GDP growth rate (calendar year) source: Cabinet Office, SNA (System of National Accounts) Projected values source: NLI Research Institute (values for 2018 and 2019 are projections)

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

▼Collapse of IT ▼Disposal of ▼Integrated ▼Progress in ▼Landslide ▼Revelation of ▼Signs of mini ▼Lehman Shock ▼Shift of power ▼First ▼Great East ▼Rise in friction ▼Sweeping ▼Consumption ▼Simultaneous ▼Bank of ▼Liberal ▼Osaka-Kansai bubble/ bad bank loans/ deflation- government's victory by seismic intensity real estate (Critical outbreak to the record-level Japan with neighbor- victory of the tax increase listing of three Japan decides Democratic Japan Expo concurrent measures for fighting structural reform Liberal documentation bubble of the global Democratic appreciation of Earthquake ing countries Liberal from 5% to 8% Japan Post to introduce Party's landslide 2025 decided stock selloff in financial measures/ Democratic forgery problem financial crisis) Party the yen in 15 affects the Democratic Group negative interest victory in House Japan and the stabilization beginning of ▼Tokyo 2003 Party ▼Ceiling in real years ▼Renews economy Party in the companies on rates of Representa- ▼Inauguration U.S. industrial revival Convergence of ▼Full-fledged estate market record-setting Upper House the Tokyo Stock tives election of fourth ▼Problem of problems ▼Enactment of economic rents appreciation of election Exchange ▼Kumamoto Abe cabinet ▼Simultaneous large supply of ▼Nikkei average postal service recovery the yen Earthquake ▼Nikkei terror attacks in newly recovers to ▼Economic privatization bill ▼Subprime ▼Tokyo elected ▼Inauguration average stock the U.S./ fears constructed about 10,000 yen recovery ▼Izanagi boom mortgage crisis/ ▼European to host the 2020 of third price reaches of simultaneous downtown ▼Nikkei curtailed effect on the financial crisis Olympics Abe cabinet 22,938 yen, the global recession offices average economy highest ever in recovers to 25 years about 14,000 yen for first time in 5 years Ofﬁce RentIndex(yen/tsubo) Class AbuildingsincentralTokyo 45,513 45,000

40,000 39,003

35,000 CAM charge exclusive Vacancy rate 30,000

Ofﬁce Rent Index 25,000

11.5% 20,000 12% 11% 9.1% 10% 15,000 9% Vacancy rate 8% 7% 10,000 6% Real GDP growth rate (calendar year) 5% 4.2% 4% 5,000 1.0% 3% 1.3% 2% 2.2% 2.0% 1.9% 1.5% 1.7% 1.7% 1.5% 0.6% 0.4% 1.4% 0.4% 1.2% 1% 0.1% 0.8%※ 1.1%※ -1.1% -5.4% -0.1%

1 tsubo ≒ 3.3 sq. m ≒ 35.58 sq. feet ※About Class A Buildings …Class A buildings are selected from among those satisfying the following guidelines. The selection is conducted periodically with an emphasis on each building’s location and characteristics and not automatically based on floor area. (Building names are not disclosed.)

11 SANKO ESTATE SANKO ESTATE 12 Building size (net leasable area/ﬂoor) High Large-scale buildings :200 tsubo or more Please refer to https://www.sanko-e.co.jp/en/data Office Market / Tokyo Medium/large-scale buildings :100 to less than 200 tsubo for latest information (monthly update). Medium-scale buildings :50 to less than 100 tsubo Small-scale buildings :20 tsubo to less than 50 tsubo 1 tsubo ≒ 3.3 sq. m ≒ 35.58 sq. feet Chiyoda Ward Low Rent levels The vacancy rate continued to trend downward for all building Legend: Large-scale Medium/Large-scale Medium-scale sizes, dropping below 1% for large-scale and medium/large-scale （¥/tsubo） Rent 35,000 buildings. Given the tight supply-demand balance, rents also 33,445 30,000

continued to rise for all building sizes. 25,000

20,000 21,086 15,000 16,195 TOSHIMA WARD Ikebukuro 10,000 5,000

0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Uchikanda, Kajicho Iidabashi, Kudan （%） Vacancy Large-scale26,306 20 BUNKYO WARD Large-scale19,133 Medium/ Akihabara Medium/ Large-scale21,486 Large-scale19,143 Medium-scale 16 Medium-scale 15,999 TAITO 16,072 Small-scale Small-scale 13,279 Ueno WARD 13,960 Sotokanda, 12 Iwamotocho Kanda 8 2.17 Large-scale22,571 Medium/ Large-scale18,109 4 0.65 SUMIDA Medium-scale Iidabashi Kojimachi, Small-scale14,636 0.64 NAKANO Imperial 0 WARD Bancho 13,124 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 WARD SHINJUKU WARD Akihabara Palace Large-scale26,350 Medium/ （tsubo） Supply *Medium-scale buildings and larger (at least 50 tsubo per floor) Kinshicho Large-scale21,600 Medium-scale Tokyo 150,000 Small-scale18,704 123,800 Shinjuku 15,688 Marunouchi, 120,000 CHIYODA Otemachi Yurakucho 90,000 84,100 Large-scale 41,520 67,700 WARD Medium/ Yotsuya Large-scale 31,595 60,000 48,000 Imperial Medium-scale 40,300 - 33,800 19,800 25,900 Palace Small-scale 23,250 30,000 Tokyo KOTO WARD 0 Rent : ¥/tsubo（CAM charge inclusive） 2014 2015 2016 2017 2018 20192020 2021 SHIBUYA WARD Chuo Ward CHUO The vacancy rate continued to decrease for all building sizes, Legend: Large-scale Medium/Large-scale Medium-scale Shibuya WARD MINATO WARD reaching its lowest level since 2009. The rate dropped below 1% （¥/tsubo） Rent 35,000 for large-scale and medium/large-scale buildings, leading to a 30,000

strong sense of scarcity. Rents also continued to recover for all 25,000 26,058 building sizes; for large-scale buildings, the rent level has 20,000 19,728 increased by 28% since 2012. 15,000 16,555 Reading Guide 10,000 5,000 About the Survey 0 Survey period: 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Nihombashi-Honcho, July 1 ‒ December 1, 2018 Nihombashi- Muromachi （%） Vacancy Meguro Survey time (rent, vacancy rate): 20 December 1 each year Large-scale26,000 MEGURO WARD Medium/ Higashi-Nihombashi, Shinagawa Subject buildings: Large-scale19,679 Shinkawa 16 Ofﬁce Buildings that were seeking tenants during the above period Medium-scale16,833 Small-scale Large-scale18,548 12 Building class (area per floor): 15,341 Medium/ Large-scale buildings: 200 tsubo or more Large-scale15,747 Medium-scale 8 Medium/large-scale buildings: 100 to less than 200 tsubo Small-scale12,945 2.61 Medium-scale buildings: 50 to less than 100 tsubo 11,403 4 *Medium-scale buildings and larger (at least 50 tsubo per floor) 1 tsubo ≒ 3.3 sq. m ≒ 35.58 sq. feet Kyobashi, Yaesu Hatchobori 0.84 SHINAGAWA Nihombashi 0 0.60 About the Terminology 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 WARD Large-scale33,762 Medium/ Etchujima Area per floor: Large-scale27,615 Medium-scale （tsubo） Supply The maximum leasable area on a standard office floor (3rd floor or higher) for 18,925 Small-scale 50,000 each building 17,364 42,500 Rent (including common area maintenance (CAM) charge): Tsukiji, Shintomi, 36,700 40,000 Average value of advertised asking rent for each individual property Kayabacho 34,200 33,400 28,400 Vacancy rate: Large-scale23,575 30,000 Ginza Medium/ Calculated by dividing the currently vacant floor space by the total leasable Large-scale16,422 21,000 OTA floor space Medium-scale 20,000 Large-scale28,455 Small-scale14,255 Total leasable floor space = office floor space available for lease to third Medium/ 7,500 parties (including affiliated subsidiaries) Large-scale25,088 13,132 10,000 WARD Medium-scale 3,400 (does not include space used by the building owner or retail/residential space) Small-scale22,759 0 Rent : ¥/tsubo（CAM charge inclusive） Newly supplied floor space: 21,295 2014 2015 2016 2017 2018 20192020 2021 Total leasable floor space in new buildings completed during the data 1 tsubo ≒ 3.3 sq. m ≒ 35.58 sq. feet collection period

13 SANKO ESTATE SANKO ESTATE 14

Please refer to https://www.sanko-e.co.jp/en/data Office Market / Tokyo for latest information (monthly update).

Minato Ward Shibuya Ward

The vacancy rate continued to decrease for all building sizes, Large-scale Legend: Medium/Large-scale Medium-scale The supply-demand balance continued to be the tightest among Legend: Medium/Large-scale Medium-scale once again reaching its lowest level since 2009. Rents also （¥/tsubo） Rent the central five wards. With a vacancy rate of just 0.13%, there （¥/tsubo） Rent 35,000 35,000 continued to increase; for large-scale buildings, the rent level has are currently almost no vacancies in large-scale buildings. Rents Large-scale 30,000 30,000 28,982 increased by 29% since 2012. New supply is concentrated in the 28,298 also continued to trend upward for all building sizes after 25,000 25,000 26,238 Hamamatsucho/Tamachi Station area and the Toranomon area. 22,732 bottoming out in 2012. 20,000 18,108 20,000 20,870 15,000 15,000

10,000 10,000

5,000 5,000

0 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Yoyogi, 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Akasaka, Sendagaya Aoyama Shimbashi, （%） Vacancy Hatsudai, Honcho, （%） Vacancy Toranomon Sasazuka Large-scale28,667 Large-scale30,760 20 Medium/ Yoyogi 20 Medium/ Large-scale22,382 Large-scale26,315 Large-scale30,889 Large-scale18,500 Medium-scale Medium-scale Medium/ 16 Medium/ Small-scale17,658 16 Small-scale19,813 Large-scale24,324 Large-scale16,000 Medium-scale Medium-scale 17,370 18,426 Small-scale18,550 12 Small-scale12,391 12 15,205 12,258 8 1.48 Harajuku 8 1.43 Roppongi, 4 Shibuya, 4 0.38 Azabu 0.80 Dogenzaka

Large-scale Hamamatsucho, 0 0 0.13 28,972 0.62 Large-scale Medium/ Takanawa 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 30,889 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Large-scale Medium/ 21,615 Large-scale Medium-scale 28,333 Medium-scale Small-scale18,529 Tamachi Large-scale24,591 Medium/ *Medium-scale（tsubo） Supply buildings and larger (at least 50 tsubo per floor) Small-scale24,208 （tsubo） Supply *Medium-scale buildings and larger (at least 50 tsubo per floor) 16,135 Large-scale 20,014 150,000 23,189 60,000 Medium-scale Shibuya 56,000 Small-scale16,639 122,500 Ebisu, Hiroo Shibaura, 13,879 120,000 48,000 Sakuragaoka, Kaigan Large-scale29,286 90,000 Nanpeidai Medium/ 36,000 Large-scale Large-scale 27,625 23,556 51,900 54,900 63,600 57,700 56,300 Medium-scale Medium/ 60,000 Large-scale33,667 24,000 Large-scale16,917 Medium/ Small-scale20,346 Medium-scale 35,000 33,500 Large-scale30,750 Ebisu 19,118 13,900 15,500 Small-scale16,063 30,000 Medium-scale 12,000 Shinagawa 21,667 7,400 11,005 Small-scale 3,500 2,900 3,700 0 0 16,426 0 Rent : ¥/tsubo（CAM charge inclusive） 2014 2015 2016 2017 2018 20192020 2021 Rent : ¥/tsubo（CAM charge inclusive） 2014 2015 2016 2017 2018 20192020 2021

Large-scale Shinjuku Ward Shinagawa Ward / Ota Ward

The vacancy rate decreased further for all building sizes. It Large-scale Legend: Medium/Large-scale Medium-scale The vacancy rate has continued to decrease for all building sizes Legend: Medium/Large-scale Medium-scale dropped below 0.5% for large-scale and medium/large-scale （¥/tsubo） Rent since 2013, but in the past year, the decrease has been slowing （¥/tsubo） Rent 35,000 35,000 buildings. As in the previous year, the rent level for down for large-scale and medium/large-scale buildings. Rents 30,000 30,000

medium/large-scale buildings was the lowest in the five central 25,000 27,348 have continued to trend upward since bottoming out in 2012, but 25,000 wards, while for large-scale buildings, it was the second lowest the increase is tailing off for large-scale buildings. 20,000 18,869 20,000 18,014 after Shibuya Ward. 15,000 15,333 15,000 15,795 10,000 10,000 13,053 5,000 5,000

0 0 Takadanobaba, 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Okubo Gotanda, Osaki Kita-Shinagawa, （%） Vacancy Higashi-Shinagawa （%） Vacancy Large-scale Waseda, 19,250 Large-scale Medium/ 20 20,711 20 Large-scale Kagurazaka Medium/ 14,914 Large-scale Large-scale Medium-scale 17,563 19,333 Medium-scale Medium/ Small-scale14,507 Large-scale - 16 15,664 Large-scale14,433 16 Medium/ Small-scale Medium-scale 12,515 Large-scale15,004 13,739 14,300 Medium-scale 12 Small-scale 12 Small-scale13,816 Osaki 10,585 11,191 Takadanobaba 8 2.30 8 3.33

Shinjuku, *Medium-scale4 buildings and larger (at least 50 tsubo per floor) 0.47 4 *Medium-scale buildings and larger (at least 50 tsubo2.40 per floor) Kabukicho Iidabashi Okubo 0 0.30 0 1.13 Large-scale 26,800 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Medium/ Oimachi Large-scale18,619 Shinjuku Medium-scale 16,736 tsubo tsubo Small-scale Ichigaya （） Supply （） Supply Nishi-Shinjuku 14,810 40,000 50,000 Omori, Kamata Yotsuya, 33,500 Large-scale28,455 32,000 40,000 Medium/ Ichigaya Large-scale13,667 36,500 Large-scale25,860 Medium/ Medium-scale 22,700 Large-scale14,575 Large-scale 24,000 30,000 Small-scale18,599 26,000 Medium-scale Medium/ 18,100 10,748 24,100 23,400 18,155 Large-scale15,500 Small-scale Omori Medium-scale 16,000 10,667 20,000 13,700 Small-scale13,415 13,400 12,571 8,000 10,000 4,000 5,800 5,000 5,900 2,700 3,300 400 0 0 0 Rent : ¥/tsubo（CAM charge inclusive） Rent : ¥/tsubo（CAM charge inclusive） 2014 2015 2016 2017 2018 20192020 2021 2014 2015 2016 2017 2018 2019 2020 2021

1 tsubo ≒ 3.3 sq. m ≒ 35.58 sq. feet 1 tsubo ≒ 3.3 sq. m ≒ 35.58 sq. feet

15 SANKO ESTATE SANKO ESTATE 16 Guidelines for Opening an Office

Formation of relocation plan Building tours Contract signing After contract signing （Clarification of basic outline）（Selection of candidate properties）（Conclusion of lease agreement）（Follow-up service）

1. Confirming requests and understanding 1. Introducing properties 1. Helping in fulfilling the application require- 1. Recommending related business operators the current situation ・ Providing detailed information on each ments ・ Recommending interior furnishing compa- ・ Interview to learn relocation objectives, etc. building ・ Negotiating terms such as financial nies ・ Confirmation of current contract content requirements ・ Recommending moving companies, etc. 2. Explaining the office market condition 2. Touring candidate buildings 2. Checking lease agreement content 2. Consultation after move-in ・ Briefing on market conditions in desired ・ Providing a comparison chart of candidate ・ Explaining and advising on articles in the ・ Checking customer satisfaction level after area buildings contract moving in ・ Negotiating the terms and conditions in the ・ Responding to inquiries upon contract contract renewal 3. Confirming the basic outline 3. Narrowing down the candidates 3. Final confirmation before signing the lease 3. Providing updated information ・ Confirmation of basic conditions such as ・ Providing simulations of various factors agreement ・ Providing the latest office market trends lease terms, location, required space and (cost, layout, etc.) ・ Final confirmation of the contract content information facilities ・ Confirming the status of candidate proper- using the Important Lease Conditions Booklet ・ Drafting of relocation schedule (moving-in, ties and conducting preliminary regarding the Property and Transaction. timing of restoration work), etc. negotiations ・ Explaining detailed rules and regulations, etc.

Estimated Schedule (Example of 500 tsubo (1,650 m²) or more)

Current Building 1 month 2 month 3 month 4 month 5 month 6 month 7 month 8 month 9 month 10 month 11 month 12 month

Current Lease Agreement Termination notice Moving Restoration Submit Termination Notice / Restoration

Rent & Common Area Maintenance Charges Termination New Building New Lease Agreement Planning Basic Strategy Planning Basic Strategy / Essential Qualification Inspection / Finalize the Candidate / Essential Qualification Submit Application Form Finalize the Candidate Submit Final Application Form Explanation of Important Lease Conditions Lease Commencement Day Review the contract / Signing the Contract Signing the Lease Contract

Decide the PM Company Master Schedule / Role Assignment Current Space / Facilities Analysis Physical / Layout / IT / Telecommunication Storage / Meeting Space, etc. Inspect Bldg. Architectural and Infrastructure Conditions

Work Division / Facility Requirements Moving

Office Concept Space, Review Technology Requirements

Conceptual Design 2 months Preliminary Design / Design Concept Decide the Layout

Cost Analysis Approval of Estimated Cost

Interior Design Development

Assist in Bidding Bidding Process

Construction Move in

Schedule for the Board

17 SANKO ESTATE SANKO ESTATE 18 Guidelines for Opening an Office

Important Terms Contracted Space (Keiyaku Menseki 契約面積)

The following are some of the terms unique to the Japanese office rental market that This term may apply to exclusive usable space, or to ① Exclusive usable space (Senyu Menseki 専有面積) you may find useful to know. both exclusive usable space and a part of the common space This term refers to the space used exclusively by the (① yellow part only, or ① + ② blue part). tenant; it is measured from wall center to wall center. (Taishin Seino 耐震性能) Seismic Performance ② Common space (Kyoyo Menseki 共用面積) This term refers to space used in common by two or more tenants. It might include elevator halls, corri- Earthquake-resistant Vibration-controlling Seismically-isolated ① dors, restrooms, kitchenettes, and the like. structure (Taishin Kozo 耐震構造) structure (Seishin Kozo 制振構造) structure (Menshin Kozo 免震構造) Structure designed and built to Structure equipped with devic- Structure mitigates the effect of earth- Unit of Space 0HQVHNL7DQ·L 面積単位) withstand earthquakes, wind es such as dampers to control quakes with devices that reduce sway- The official unit used to measure floor space is the square and other forces. and curb vibration energy. ing, commonly meter, but many property owners still use the older term EV WC WC rubber bearings “tsubo” in their floor plans and advertisements. and dampers ② (1 tsubo ≒ 3.3 sq. m≒ 35.58 sq. feet) placed between the building and its foundation (Hoshokin or Shikikin 保証金/敷金) that move flexi- Deposit Money bly horizontally. Seismic Engineeringring Seismic, Isolation, ...... The terms “hoshokin” and “shikikin” are both used to Sum

Approachesh Layer mean “deposit money. ” Though they have slightly different meanings, they essentially refer to a sum As a normal rule, 10-12 month’s rent will be charged which is paid to the owner as a non-interest deposit as deposit money. when moving into a property. Legally this money Emergency Power Supply (非常時における電源供給) could be classified as a down payment on the rent, or as “guarantee money” against any liability that the Depreciation Fee (Shokyaku-hi 償却費) tenant might incur against his duties as a tenant. Owners of small-sized buildings often demand that Office buildings equipped with emergency power generation systems tenants pay a depreciation fee. This is deducted as a Return Period Typical office buildings have uni-directional power supply systems that receive power from a single transformer percentage from the deposit (usually 10% to 20%) substation, so if the supply from a substation is cut off during an incident or disaster, it takes time to restore power The deposit money will be returned to the tenant when the contract ends, and the deposit minus the to the building. after the “surrender by the lessee of the leased fee is then returned to the lessee. The term “depreci- In contrast, office buildings with bi-directional power supply systems receiving power from another transformer premises to the lessor.” Any unpaid rent or damages ation” is used here, but there is no direct relationship substation on a separate network can continue to provide power to the building’s exclusive areas even if the recoverable from the lessee will first be deducted between the fee and building depreciation. supply from one substation is cut off. from the deposit, and the difference will be refunded. Recently an increasing number of high-spec buildings are making this bi-directional power supply system even more safe and BCP※-ready by adding emergency power generation systems powered by medium-pressure gas and oil tanks installed in the buildings. ※BCP (Business Continuity Planning) Rent (Chinryo 賃料)

Typical Buildings Buildings with Bi-Directional Power Supply Beginning of Lease Terms Increases in Rent As a general rule, the rental period begins on the Three basic reasons for rent increases during the day that the tenant moves into the facility. If, howev- contract period or signing a new lease agreement. er, equipment is brought to the office prior to the actual move, or if any remodeling is required. Rent ① Taxes on the land or on the building itself have starts on the day that this work begins. increased. ② There has been a sharp increase in the general Substation A Substation A Substation B cost of living due to inflation, etc. Rental Payments Due ③ The rent is shown to be lower than rents for similar Buildings with Bi-Directional Power Supply facilities in the same neighborhood. and Emergency Power Generation The common practice is to pay rent a month in ad- (Medium-Pressure Gas and Oil Tanks) vance, with the payment for the following month Such increases can be implemented with the agree- coming due at the end of the current month (be- ment of both parties. tween the 25th and the last day of the month). COST(Monthly Expenses + Deposit Money) Method of Payment Monthly Expenses: ─RENT In general bank transfers or postal transfers have ─OTHER EXPENSES Substation A Substation B become the most common way to pay one’s rent. Parking lot fees, and fees for the use of building sign boards Medium-Pressure Gas Emergency Power Generation Electric Charge, Water Charge, Gas Charge, Cleaning Charge, Air-conditioning & heating Charge for the leased premises

19 SANKO ESTATE SANKO ESTATE 20 Common Area Maintenance Explanation of Important Prohibitions, etc. (Kinshi-jiko禁止事項 ) Notice of Cancellation of (CAM) Charge (Kyoekihi 共益費) Lease Conditions Contract (Kaiyaku Yokoku 解約予告) (Juyojiko Setsumeisho 重要事項説明書) In general, the lessee may not: In most cases, a fee is charged monthly in addition If the lessee desires to terminate the contract at any ① Reassign the lease of the leased premises or to the actual rent. This fee is calculated on the basis Based on Article 35 of the Land and House Lease time during the term of the lease, it is stipulated that sublet the leased premises in any form of the running costs of the building, such as Electric Law, Sanko Estate will explain lease terms and con- the lessee must present advance notice of cancella- ② Assign or offer the leased premises as security Charge, Water Charge, Gas Charge, Cleaning ditions in writing (“Important Lease Conditions”) prior tion to the lessor in the time designated by the lessor to third parties including any of the rights under Charge, Air-conditioning & Heating Charge for the to signing of the Lease agreement. (usually within 6 months prior to the expected day of the contract common space such as entrance hall, elevator, the lessee’s departure, with the need to restore to the ③ Transfer any of the rights under the contract to toilet, etc. original state). If the lessee wants to cancel the con- any person other than the lessee through Generally the fee is between 3,000 yen and 7,000 tact without prior notice, the lessee is obliged to pay assignment of business, merger, or other such yen per tsubo, Recently there have been cases of a penalty for cancellation of contract equivalent to Repair Fees (Shuzenhi 修繕費) transactions the common area maintenance (CAM) charges the 6 month’s rent, as stipulated in the article of ad- being included in the rent. In addition, without the lessor’s consent, the lessee vance notice. However, in principle, early cancellation of a fixed-term lease contract is not possible. The following types of repair fees are the most com- may not co-occupy the leased premises with another monly encountered. person/party or use any name other than that of the lessee as the name of occupant. It may be permissi- Lease Type and Terms ble for the leased premises be co-occupied with the Obligations of the Property Owner Commission (Chukai Tesu-ryo仲介手数料 ) (Keiyaku Keitai・Keiyaku Kikan 契約形態・契約期間) prior consent of the lessor if the other party is finan- ① Repairs on the building itself cially related to the lessee. ② Repairs on office ceilings, walls, floors, and other Lease terms in Japan generally fall into two categories. structural members that are a part of the building In Japan, at the time of contracting for new space, it itself is the tenant and not the landlord who pays the intro- One is a regular or standard lease that usually runs ③ Repairs for the common areas of the building Restoring to Original ducer, the agent, a fee equal to one month’s rent. for 2-3 years but can be automatically renewed ④ Repairs for equipment and machinery This practice gives the tenant important advantages (Genjo Kaifuku 原状回復) unless either party wishes to terminate the contract. Condition by ensuring that the agent represents the tenant only Under this lease, tenants wanting to vacate before Obligations of the Tenant while diligently maintaining the tenant’s position and the end of the lease period can usually give written acting in the tenant’s best interests in all negotia- ① Repainting or papering of ceilings, walls, floors, notice, typically six months in advance, and then The lessee is under obligation to restore the leased tions. and other space inside the office vacate without incurring penalties. premises to the original condition at the termination ② Replacing or repairing fixtures, blinds, glass, of the contract. lighting, switches, or electrical outlets inside the A second type of lease being increasingly adopted office Building Rules and by owners of Class A buildings is the fixed term The standard for offices usually entail: ③ Repair any partitions, fixtures, special-use equip- lease. Such leases run for 2-5 years, and at the end ─ Replacement of carpet tile flooring Regulations (Kanri Kisoku 管理規則) ment, or the like that the tenant has installed in the of the lease period, tenants cannot renew. Tenants ─ Wallpaper renewal office. Check your contract carefully for any other wishing to remain in the property must renegotiate a ─ Painted walls obligations that may be faced by the tenant new contract with the owner. Also, tenants wishing to ─ Sound-absorbent plates on the ceiling and Most buildings have their own “Administrative Regu- vacate ahead of the lease expiry date must pay a fluorescent lighting lations” concerning daily administration and man- penalty equivalent to the number of months’ rent agement of the building such as opening and clos- remaining in the contract. At the termination of the contract, the lessee removes ing times (regular hours) of the building, regular Construction Involving at his own expense the fixtures and equipment air-conditioning and heating hours, use of the build- Building Structure installed or added at his expense and the property ing beyond the regular hours, working hours of jani- owned by him prior to delivering the leased premises (Kutai Ni Kakawaru Koji 躯体に係る工事) tors, and stipulations concerning keys, etc. It is rec- Renewal Fee (Koshin-ryo 更新料) to the lessor. If the lessee fails to restore the leased ommended that the regulations be confirmed with premises to its original condition at the termination of the lessor in advance, since each building has its the contract, the lessor may restore the leased prem- own set of regulations. Construction work like that below may affect the ises and charge the expenses to the lessee. It must Some landlords demand a renewal fee when lease building’s structure, the property value or other ten- be done by contractors the owner designates or ap- contracts are renewed, and this fee is usually one ants. Such work requires the building owner’s prior proves of, and the tenant bears all construction month’s rent at the rate stipulated in the new lease approval. costs. The construction work must be completed contract. within the contracted period. Some examples: ─ Construction altering the building structure (Where pillars, beams and/or ceilings are affected, or where a room partition is extended to the ceiling) ─ Changes in air-conditioning and security systems ─ Installation of heavy machines or structures ─ Change in electric equipment where the whole building's power supply system could be affected

21 SANKO ESTATE SANKO ESTATE 22 － Special Report － Office Rent Date 2019 - Special Report - 7KH$SSHDORIWKH%XVLQHVV(QYLURQPHQWLQ-DSDQ JETRO provides consultation to foreign firms concerning ③ A broad network investment in Japan. IBSC offices are located in Tokyo Provision of opportunities for matching and interaction with and other major cities in Japan (Yokohama, Nagoya, potential supporting business partners in Japan and arrange- In recent years, the Japanese government has been proactive in promoting efforts to attract foreign Osaka, Kobe and Fukuoka), providing mainly the following ment of interviews with relevant government offices, etc. firms for the purpose of generating employment and innovation. The stock of inward direct investment support services. *Certain conditions apply for the above services. *Besides the above, JETRO gives consultation for investment in Japan targeted by the policy is 35 trillion yen by 2020. The balance at the end of 2017 was 28.6 trillion yen, through its approx. 70 overseas offices in more than 50 countries and offic- marking a record high for the fourth consecutive year. The Japanese government plans to continue ① Consulting for individual companies es in various places in Japan. promoting the adjustment of various policies as well as the business environment to transform Japan Advisory for individual companies regarding Japanese business practices, information on policies for different Since establishing IBSC in 2003, JETRO has supported into the most business-friendly country. This section will explain the evaluation of the Japanese industries, etc. approx. 1,800 foreign/foreign-affiliated companies which succeeded in establishing bases or expanding business- business environment by foreign firms and the key points for succeeding in Japan. ② Use of temporary offices free of charge Smooth preparation for establishing an office in central es. In recent years those in the ICT and telecommunica- business areas across Japan is enabled (period of stay is tions field are increasing their presence while the ratio of 50 business days in principle). those in the medical and medical equipment field and The Japanese Market Is Seen as Highly Profitable tourism field are trending upwards. The concentration on Tokyo is being gradually eased with a relative increase in The “rate of inward direct investment returns” is an index The Japanese market has received positive appraisal investment in areas other than Tokyo. that shows how effective direct investment is in terms of from foreign firms in Japan as a market with high profit- profits with regard to foreign firms advancing into different ability. The following is the result from a questionnaire Saitama（22） Others（93） countries. The rate is calculated by dividing the direct survey on the Japanese investment environment conduct- 6HUYLFHV Fukuoka（35） investment return payment amount by the balance of ed by the Japan External Trade Organization (JETRO) in IRRGDQGEHYHUDJH Chiba（41） inward direct investment. The average rate of inward 2018. Others UHWDLOFRQVXOWLQJRWKHU Hyogo（68） direct investment returns in Japan from 2008 to 2017 is 24% 24% Aichi（102） 9.0%, a high level compared to major countries and Transportation (YDOXDWLRQRIWKH-DSDQHVH0DUNHW Other than areas. Also, according to the Organisation for Economic equipment, IURPD3URILWDELOLW\3HUVSHFWLYH By Industry Tokyo parts Osaka 138 Co-operation and Development (OECD), Japan ranks )<)< （） 39%（693） 6% FXPXODWLYH Tokyo third among 22 countries in inward direct investment Profitability is low 61%（） returns as of 2014, and first in service industry excluding 3.8% ICT and financial and insurance industries. Pharmaceuticals and telecommunications Kanagawa（194） medical equipment, 22% Profitability is high UHODWHGVHUYLFHV 19.2% Profitability is 6% International Comparison of Inward Direct more or Electrical and FY2003-FY2017 (cumulative) ,QYHVWPHQW5HWXUQV $YHUDJHIURPWR less low Industrial machinery, parts electronic equipment, parts (%) 25.4% 8% 10% 10.0 Source: “JETRO Invest Japan Report 2018” by JETRO 9.0% 8.4% 8.0 Profitability is more or less high 6.0 51.5% Key Points for Succeeding in Japan 4.8% n=260 There are several key points when it comes to foreign Japan, cautionary points concerning the law, information 4.0 3.3% 3.3% firms succeeding in Japan. One is the selection of an on surrounding environments and characteristics of vari- 2.0 *The questionnaire targeted approx. 1,700 foreign firms, mainly those office that matches the conditions for the company. Key to ous areas and other valuable information that is important which JETRO supported when entering the Japanese market. Of this, 266 this is obtaining information on many buildings from vari- for selecting an office. Additionally, support is provided in companies gave valid responses. The questionnaire was conducted 0.0 ous angles. Sanko Estate owns information on buildings a versatile manner such as through medium- to long-term between May and June of 2018. Japan Hong Korea India UKGermanyFrance USA Kong Source: “JETRO Invest Japan Report 2018” numbering 100,000 across Japan, and not only on vacan- schedule management of office strategies, negotiations cies that are made public. Valuable information that is not with buildings owners and follow-up services after the (Note) Rate of inward direct investment returns = Direct investment return payment amount as of the period / Balance of inward direct investment at made public, obtained through solid relationships of trust move-in. Be assured that all services are provided in the beginning/end of the period × 100 (%). with building owners, is included as well. Also provided is English. (Source) “JETRO Invest Japan Report 2018.” Prepared using “IMF Data information on real estate business practices peculiar to Warehouse” by IMF (dated June 22, 2018) and “International Investment Position of Japan” by the Ministry of Finance and Bank of Japan.

Benefits of consulting Sanko Estate 1. All services are provided in English from the point of inquiry onwards. -(752·V2QH6WRS6HUYLFHIRU(VWDEOLVKLQJDQRIILFHLQMDSDQ 2. Building information that is not released to the market can be provided. 3. Beneficial lease terms are obtained through strong negotiations. The following is a government-related organization that provides official consulting services for investing in Japan. 4. Potential troubles of real estate transactions are avoided. Japan External Trade Organization (JETRO) (JETRO Invest Japan Business Support Center: IBSC) 5. The overall move-in schedule is managed. Tel: +81-3-3582-4684 JETRO’s home page: https://www.jetro.go.jp/en/invest Inquiry: International Department, Sanko Estate Co., Ltd. www.sanko-e.co.jp/en +81-3-3564-8051 [email protected]

23 SANKO ESTATE SANKO ESTATE 24 Company Outline COMPANY LOCATION COMPANY OVERVIEW Head Office: Sapporo Office: Ginza Sanwa Bldg., 4-6-1 Ginza, Chuo-ku, Tokyo Sapporo Kita-Sanjo Bldg., 3-1 Nishi, Company Name Sanko Estate Co., Ltd. Kita 3-jo, Chuo-ku, Sapporo-shi, Hokkaido Established May 17, 1977 Shinjuku Office: 〈Area〉 Hokkaido President Shigeo Takei Kowa Bldg., 1-23-3 Nishi-Shinjuku, Shinjuku-ku, Tokyo Capital ¥100,000,000 Sendai Office: Employees 253（ 406 for entire group） Shibuya Office: Aoba-Dori Plaza, 3-2-1 Chuo, Aoba-ku, Sendai-shi, Miyagi Towa Miyamasuzaka Bldg., 1-14-9 Shibuya, 〈Area〉 Miyagi, Aomori, Akita, Iwate Shibuya-ku, Tokyo Fukushima, Yamagata Company Services Group Companies Office leasing services, Project management services, Sanko Office Management Co., Ltd. Toranomon Office: Nagoya Office: Workplace consulting MS Building Support Co., Ltd. Unpin Toranomon Bldg., 1-1-23 Toranomon, Sakura-Dori Otsu Daiichi Seimei Bldg., Commercial Property Research Institute, Inc. Minato-ku, Tokyo 3-4-6 Nishiki, Naka-ku, Nagoya-shi, Aichi License 〈Area〉 Aichi, Mie, Gifu, Shizuoka, Real estate agent: Professional Affiliations Kanda Office: Nagano, Fukui, Ishikawa, Toyama License authorized by Minister of Land, Tokyo Real Estate Brokers Association Shibashin-Kanda Bldg., 1-26 Kanda Sudacho, Infrastructure, Transport and Tourism（ 10） No. 3105 National Real Estate Guarantee Association Chiyoda-ku, Tokyo Osaka Office: First-class Architect Office Registration: Japan Facility Management Association Midosuji Mitsui Bldg., 4-1-3 Bingomachi Governor of Tokyo No. 61819 The Tokyo Chamber of Commerce and Industry Chuo-ku, Osaka-shi, Osaka British Chamber of Commerce in Japan 〈Area〉 Osaka, Kyoto, Hyogo, Shiga, Nara, The American Chamber of Commerce in Japan Wakayama, Okayama, Hiroshima, Shimane, If you have any inquiries, please contact Tottori, Kagawa, Tokushima, Kochi, Ehime International Department.（Head Office） TEL: +81-3-3564-8051 Fukuoka Office: WEBSITE FAX: +81-3-3564-8060 Hakata Taihaku Dori Bldg., 1-5-1 Hakata-ekimae, http://www.sanko-e.co.jp/en Hakata-ku, Fukuoka-shi, Fukuoka E-mail:[email protected] 〈Area〉 Kyushu, Okinawa, Yamaguchi Introduction of Office Building Search System

SAPPORO

SENDAI

OSAKA TOKYO（Head Oﬃce/Ginza） SankoSanko Estate Co., Ltd. announces that it added a ・S h i n j u k u ・S h i b u y a search functionfunction forfor officeoffice buildings to its English website on November 8, 2018. This enables users to FUKUOKA ・T o r a n o m o n ・K a n d a search fforor propertiesproperties located in the mamajorjor areas ofof NAGOYA ToTokyokyoasw as wellell as inin SaitamaSaitama and and Yokohama.Yokohama https://www.sanko-e.co.jp/en/search/

25 SANKO ESTATE SANKO ESTATE 26