New Peak of Office Supply Around 2025
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http://realestate.nikkeibp.co.jp/ The Premier Infor m ation Source on Japan Property MONTHLY Feature Survey New Peak of Office Supply Around 2025 Development underway for 96 buildings, 10.22 million m2 GFA (Photo: PIXTOKYO / PIXTA) By Ikuko Hashimoto A total of 96 large-scale office buildings, each with a gross floor area of at June 2020, Issue 131 least 10,000 m2, are to be completed in the 23 wards of Tokyo in or after 2020 for an aggregate gross floor area reaching 10.22 million 2m . The Survey number of plans for buildings that were newly identified from last year’s New Peak of Office Supply Around 2025 survey was 16. Among these, there are two large-scale projects exceeding Development underway for 96 100,000 m2 and another supply peak is expected to arrive around 2025. buildings, 10.22 million m2 GFA 1 Under Construction Survey Large Developments Commence Construction starts for 1.67 million m2 This survey covered buildings in Tokyo’s 23 wards with a gross floor area GFA in 17 projects 6 of at least 10,000 m2, whose primary usage was offices. The survey was Market Knowledge conducted in April 2020 including both own use and leased buildings. COVID-19 Impact on 2020 Investment Policies 10 The aggregate gross floor area of buildings to be completed in or Deals Roundup after 2020 is equivalent to about 41 buildings the size of Toranomon Goldman private REIT purchases Hills, which was completed in 2014. Looking at the supply in each Shibaura office building 11 year by aggregate gross floor area (Figure 1 on page 2), the supply Relocation Update Fuji Xerox to lease over 6,000 tsubos in 2020 will increase to a level nearly double that of 2019 and 2.26 at Toyosu Bayside Cross Tower 12 million m2 of office buildings will be completed. While supply will News Digest plummet in the following year of 2021 and in 2022, it is anticipated NTT Urban to develop mixed-use that the supply will turn to increase in 2023 and maintain a rate of facility in New York 13 over one million m2 per year thereafter. Even with currently revealed projects alone, 2025 will see supply exceeding two million m2, the same level as 2020. However, the impact of economic changes due to the spread of the COVID-19 pandemic on development plans remains an unknown. The map on page 3 shows the locations of the 96 projects that were covered by this survey. Keikyu and Toyota pursue joint development in This is a monthly edition of the Nikkei Real Estate Shinagawa Market Report, a subscription based online information resource focusing solely on commercial As East Japan Railway (JR East) advances its Shinagawa property investment in Japan. Development Project (Phase I), railway operator Keikyu © 2020 Nikkei Inc., Nikkei Business Publications, Inc. All Rights Reserved. 1 Corporation and Toyota Motor jointly launched West, stand. Furthermore, for the “station block dis- the Shinagawa Station West Exit Takanawa trict” where Shinagawa Station is located, Keikyu 3-Chome District Development in the same plans to bring the station platforms of the Keikyu lines Shinagawa area. They will build a mixed-use build- down to the ground level and to conduct a large-scale ing with over 200,000 m2 of gross floor area on the development centered on a mixed-use building com- approximately 25,000 m2 site of Shinagawa Goos, prising offices, stores, a hotel and more. a 30-storey hotel complex just across a street from Shinagawa Station. Part of the land owned by Keikyu Two projects have emerged in the Gotanda/Osaki will be transferred to Toyota, and part of the com- area. The Higashi-Gotanda Ni-Chome District 3 pleted building will be used by the Aichi-based auto Redevelopment Project, located between JR Gotanda manufacturer as its Tokyo office. Targeting global Station and Osaki Station, will include development companies inside and outside Japan and interna- of an office building having approximately 20 floors tional level conferences and hotels, the construction above ground with approximately 70,000 m2 of gross will start in or around 2024 aiming for completion floor area, a residential building having approximately around 2027, when the JR Linear Chuo Shinkansen 40 floors above ground with approximately 41,000 m2 maglev line starts operations between Shinagawa of gross floor area and approximately 390 units, and a and Nagoya. park on a site of around 15,200 m2. General contractor Takenaka has joined the project as a business partner Though not shown on the map, Keikyu will also rede- and approval of the urban planning project is slated for velop the approximately 8,000 m2 of land in the late June 2020. Most of the surrounding blocks have adjacent “Takanawa Yonchome District” on which already been redeveloped into a number of super high- Keikyu Dai-Nana Building and Keikyu Dai-Ichi rise buildings and tower apartments. Building, which accommodates Wing Takanawa The other is Nishi-Gotanda 3-Chome Project, located about midway [Fig. 1] Large Office Building Projects by Year of Completion between JR Gotanda Station and Number of buildings Meguro Station on the west side 0 10 20 30 40 50 of the JR Yamanote Line. Here, 22 2019 the former site of JR East’s com- 1,170 pany housing and substation will 22 2020 be divided into three plots and the 2,260 group will construct three buildings 14 2021 with an aggregate gross floor area of 610 approximately 95,800 m2. Building 13 2022 A will be constructed on a plot near 670 JR Gotanda Station as a mainly 13 2023 1,700 office building and will have 13 floors above ground and one below with 10 2024 2 1,190 39,000 m of gross floor area. JR 10 East Building is the developer and 2025 2,180 construction will start in May 2020, with completion targeted for April 2026 12 and after 1,520 2022. Building B and Building C, 2 mainly residential, will be developed TBD Number of buildings 80 Aggregate gross floor area by JR East Urban Development for the former and jointly devel- 0 500 1,000 1,500 2,000 2,500 Aggregate gross floor area (thousand m²) oped by Nomura Real Estate Development and JR East Urban Note: Mixed-use property development projects for which completion spans multiple years, there are some in which the aggregate gross floor area is equally distributed to each completion year. Development for the latter. (continued on page 4) © 2020 Nikkei Inc., Nikkei Business Publications, Inc. All Rights Reserved. June 2020, Issue 131 2 Koenji 明大前駅 Kamiyacho Nakano Sasazuka Shimokitazawa Toranomon Nakano-Sakaue Ikejiri-Ohashi Yoyogi-Uehara Nakai Higashi-Nakano Yoyogi-koen Uchisaiwaicho Government Metropolitan Nakameguro Shimbashi Okubo Harajuku Yoyogi Shinjuku Shin-Okubo Seibu-Shinjuku Takanodai Takadanobaba Shibuya Meiji-Jingumae Higashi-Shinjuku Shinjuku-Sanchome 22 20 Sendagaya Tokyo Station area Ebisu fmr. Kyodo Printing HQ Marubeni New HQ Meguro 33,028 80,603 25 Omotesando Otemachi One Tower Uchi-Kanda Itchome PJ New Large-Scale Office Building Map 357,700 Mitsui & Co. Building 84,500 Shinanomachi 20 Bunkyo Garden Fukuda Denshi HQ Nihonbashi-Muromachi 3 21 Gate Tower 13,700 20 20 Itchome A Tohan HQ 94,728 21 Waseda 114,500 11,400 Sumitomo's Kanda-Izumicho Bldg. 10,008 Gotanda Yotsuya Osaki Roppongi Yaesu 1-chome North Block S 2020 Aoyama-Ichome 21 21 Nippon Express 23 Kuramae 26 Sumitomo's 21 180,500 D Tower Nishi-Shinjuku Azabu-Juban New HQ PJ Office Oimachi OchanomizuIchigaya Bldg. Marunouchi 1-3 27 Nishi-Shinjuku 5-chome North A 39,461 42,599 30,000 Otemachi Akasaka-Mitsuke 12,679 Annex 20 90,824 180,988 Tokiwabashi PJ 23 Tower 20 21 Nihonbashi Itchome Shirogane- Takanawa 35 20 Yotsuya Tower 22 B 490,000 A 146,000 Central C 21 139,594 fmr. Kudan Kaikan 20 KANDA SQUARE 362,600 25 67,738 T&T III Bldg. Nagatacho 85,257 Kokkai-Ggijidomae Shinagawa 10,766 KABUTO ONE Yaesu Itchome East IidabashiIidabashi Tameike-Sanno Shinbaba 20 B 229,750 Nippon Koei New HQ 39,170 Tokyo Station area A 12,200 Mitaeki Tamachi 17,565 25 20 Nihonbashi-Kabutocho Tennozu Kasuga 25 Toranomon Korakuen Isle /Kayabacho 1-6 PJ 21 Nihombashi San- 20 Suidobashi 22 Shinagawa Seaside fmr. Yanmar Tokyo Bldg. 21 Chome Kyodo Bldg. Kasumigaseki 24 Daimon 21,835 22 Sumitomo's Kojimachi Kudanshita 14,365 Hibiya Yaesu 2-chome North A-1 Jingu-Gaien PJ Garden Tower 24 22 Kanden Realty & 283,896 25 Jinbocho Office 213,000 Hamamathucho 47,950 Development Yaesu Bldg. Sanchome Shimnbashi Hongo- 13,374 Complex A 127,300 fmr. Kokusai Akasaka Bldg. Ochanomizu Shiodome 73,000 31 Ginza New Toda Bldg. the ARGYLE aoyama 26 fmr. Kokusai 29 Yaesu 2-chome Center 95,000 23,129 Shin-Akasaka Bldg. Yurakucho 24 418,000 [Explanatory Notes] fmr. Seiho Bldg. Tokyo 20 24 17,530 fmr: Akasaka Kanda Development Name 24 Toranomon/Shimbashi Yurakucho Sta. PJ Block 2 22 Minami-Aoyama Twin Tower Nihonbashi 10,900 Actual building names are used Daiba Shin-Nihonbashi 3-chome PJ Akihabara if they have been announced 209,700 23 Shibuya 15,000 Tsukiji Fujisoft Shiodome Bldg. A 20 Scramble Square Toranomon/Azabudai PJ Main Ueno Toranomon Hills Center 460,248 23 20,290 96,000 22 Okachimachi Business Tower West fmr. Toho Twin Tower Bakurocho Tsukishima 23 Hatchobori Tokyo Portcity Takeshiba Office 181,777 Aomi 27 16,697 Tokyo Teleport 24 172,925 Kayabacho Shibuya Dogenzaka 2-chomeAriake-tennis-no-mori PJ 27 Shibuya 2-17 PJ Waters Takeshiba 62,300 41,950 23 Hamamatsucho 2-chome PJ Main Asakusabashi 44,560 fmr.