Survey of Large Office Building Supply in the 23 wards of Tokyo '06 -As of : December, 2005-

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Samson Vernon Hodges
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1 Survey of Large Office Building Supply in the 23 wards of Tokyo '6 -As of : December, 25- Since 1986, Mori Trust Co., Ltd. (head office: Minato-ku, Tokyo) has conducted a series of field surveys and questionnaires in the 23 wards of Tokyo on large office buildings with a total floor area of 1, or more, covering topics such as the progress of building project plans. The following are the findings of the latest survey. Note: In this survey, the supply of office buildings is measured in terms of the total floor area used exclusively for offices. As such, the floor areas used for retail stores, residences, hotels and other non-office purposes are excluded. From provision of massive quantity to a steady supply Renewal of urban business center functions accelerates as rebuilding replaces redevelopment of underutilized or unused large-scale sites as the primary mover Key points in the results of this survey Trends in supply volumes: Supply is in a decreasing trend over the mid-term, as average annual new supply falls from 1.24 million square meters (in 2-24) to 95, square meters (in 25-29). Although the volume of supply in 26 has reached 1.64 million square meters the third highest figure on record supply in 27 appears set to return to 1.6 million square meters, a level in line with past averages, with figures for 28 and 29 likely to fall below 1 million square meters. As it returns to a level of average annual supply in the range of 1 million square meters, the market is shifting from a period of massive quantity provision centered on redevelopment of underutilized or unused large-scale sites in 2-24 to a period of steady supply. Trends in areas in which supply is located: The trend toward tenants returning to central Tokyo is likely to continue for the time being, with concentration in the Otemachi, Marunouchi, and Yurakucho areas in Chiyoda Ward becoming even more pronounced. More than 7% of supply in the period will be centered in three of the central wards of Tokyo (i.e., Chiyoda, Minato, and Chuo wards), with the trend toward tenants returning to central Tokyo appearing likely to continue for the time being. Of these three wards, Chiyoda and s in particular stand out, with each accounting for more than 3% of supply. In Chiyoda Ward, concentration in the Otemachi, Marunouchi, and Yurakucho areas is becoming even more pronounced, while in Minato Ward supply stands out in business districts that have seen higher concentrations of office space recently, such as Akasaka, Shiodome, and Roppongi. Movement toward supply via rebuilding: Rebuilding replaces redevelopment of underutilized or unused large-scale sites as the primary mover. Although during the period 2-24 supply of large-scale office space through rebuilding accounted for no more than 2% of the total, in the period this percentage will increase to 51% exceeding the supply from redevelopment of underutilized or unused sites, which had been the primary mover in the market. Furthermore, the percentage of supply from rebuilding in Chiyoda and Minato wards, the core areas of new supply for the future, will reach 6-7%. These data lend support to the market trend of office tenants returning to central Tokyo mainly through rebuilding. For further information, please contact: Research & Planning Section Miyuki Ban Sales Department Mori Trust Co., Ltd. Toranomon 2-chome Tower, 3-17 Toranomon 2-Chome, Minato-ku, Tokyo 15-1 JAPAN Tel: / Fax: ban-m@mori-trust.co.jp

2 Future market prospects The shift toward a supply structure focused on rebuilding that has begun to be actualized recently is a sign that in the process of its maturing as an international business center Tokyo is on the verge of entering a period of renewal of office stock that is no longer suited to the times. In fact, changes in the market environment such as increased risk of a large-scale earthquake and the appearance of asbestos-related issues have thrown into relief the presence of inadequate stock that cannot be overlooked, leading to growing demand for renewal of building functions through means such as rebuilding. In Tokyo, the need for renewal is swiftly growing for a wide range of structures including not just office buildings but also structures such as roads built for the 1964 Tokyo Olympics, public housing, and lifeline facilities that in about ten years will mark the 5th year since their construction. A wide range of the social stock that makes up the urban space was built giving top priority to meeting the quantitative needs of the growth in population and infrastructure that accompanied Japan s period of high economic growth in the postwar years. It is hoped that this renewal will provide the opportunity for future progress in quantitative and qualitative improvements in the urban stock, as well as restructuring of the distribution of this stock, using as a yardstick for value the creation of ample urban amenities, so essential to a mature international urban center.

3 Figure 1-1: Trends in supply volume of large-scale office buildings in the 23 wards of Tokyo Key Key Completed supply Incomplete supply under construction Incomplete supply not yet under construction Supply quantity 12 1, (Buildings) Supply quantity 2-24 average supply: 1,24, / year average supply: 1,2, / year average supply: 84, / year average supply: 95, / year '86 '87 '88 '89 '9 '91 '92 '93 '94 '95 '96 '97 '98 '99 ' '1 '2 '3 '4 '5 '6 '7 '8 '9 (own buildings) Figure 1-2: Trends in average total office floor area per building (five-year intervals) 27, / building 29, / building 36, / building 43, / building 51, / building /6

4 Figure 1-3: Large-scale office supply volume in the 23 wards of Tokyo and individual key business districts (25-29) 23 wards Three central wards 74 Business districts Higashi-ikebukuro 5% 2% 5% 7% 7% 35% Nishi-shinjuku Koraku Iidabashi Kudan Akihabara Jinbocho Ogawamachi Uchikanda Kinshicho 33% Chuo ward 6% Jingumae Akasaka Hirakawacho Kasumigaseki Uchisaiwaicho Otemachi Marunouchi Yurakucho 1,9, Ningyocho Yaesu Nihonbashi Muromachi Kiba 1,66, Shinsen Shibuya Aoyama Roppongi Toranomon Hamamatsucho Ginza Shiodome Tsukiji Tsukishima Harumi Toyosu Chuo ward 28, 1,59, Approx. supply volume Shirokane-takanawa Shiba Mita Shibaura Shinkiba 25, 8, 32, 35, 22, 4, 2, 4, 2, 1, 1, Osaki Gotanda Shinagawa(Konan) Figure 1-4: Trends in the top 1 districts in terms of large-scale office supply volume (25-29) (1, ) K e y Otemachi Marunouchi Yurakucho Shiodome Akasaka Roppongi Shinagawa Nishishinjuku (Konan) Akihabara Osaki Gotanda Toyosu 4/6

5 Figure 1-5: Large-scale office supply volume in the 23 wards of Tokyo and individual key business districts wards Three central wards 35 Business districts Honkomagome Hakusan 8% Chuo ward 5% Gokokuji 19% 13% 11% 13% Shibuya ward 9% 22% Sasazuka Nakano-sakaue Nishi-shinjuku Yoyogi 49, Shinjukugyoen Sendagaya Jingumae Shinanomachi Aoyama Kagurazaka Koraku Akasaka Hirakawacho Bancho Toranomon Iidabashi Kudan Kasumigaseki Uchisaiwaicho Shinbashi Otemachi Jinbocho Ogawamachi Kanda Ginza Nihonbashi Kyobashi Tsukiji Kayabacho Shinkawa Kuramae Hamacho Kinshicho Toyocho chuo ward 32, 21, 92, Sangenjaya Ikejiriohashi Utagawacho Sakuragaokacho Approx. supply volume Shibuya Ebisu Hiro-o Shiba Shibaura kaigan Kachidoki Tsukishima Shiomi 36, 47, 56, 53, 4, 2, 4, 2, Meguro Osaki Shinagawa (Konan) Tennozu 54, 81, 1, Oi wards Three central wards 75 Business districts Shinagawa ward 6% 6% 4% Chuo wards 6% 3% 39% 25% Chuo ward 11% 1,56, 67, 2,44, 23, 34, 4, 21, 34, Takadanobaba Nishishinjuku Yoyogi Dogenzaka Sakuragaokacho Approx. supply volume 4, Nakameguro 2, 4, 2, 1, Sendagaya Jingumae Shibuya Meguro Higashishinagawa Yotsuyasanchome Ebisu Aoyama Gotanda Kagurazaka Koraku Toranomon Shiba Mita Iidabashi Kudan Jinbocho Ogawamachi Kojimachi Bancho Nagatacho Kasumigaseki Akasaka Roppongi 51, Oi Hamamatsucho Shibakoen Shinagawa(Konan) 6, Nihonbashi Kyobashi Honcho Kayabacho Otemachi Marunouci Yurakucho 79, Shiodome 73, Shibaura Kaigan Kanda Ginza Akihabara tsukiji Harumi Asakusa Toyosu Kinshicho Toyocho Kiba Monzen-nakacho 5/6

6 Figure 1-6: Percentages of large-scale office supply volume by site type ,24, (2%) Underutilized or unused site: 4,95, (8%) 3,36, (54%) Former Japan National Railway sites: 1,59, (26%) 2,33, (49%) 2,4, (43%) 2,42, (51%) Former Japan National Railway sites: 29, (6%) Refers to land on which structures such as office buildings, hotels, and residential properties that had used the site in its entirety have been demolished in the development or sale stage. Refers to sites such as those with scattered patches of unused land including parking facilities and old buildings, sites with concentrations of residential properties, factory sites, rail yards, and idle land. Figure 1-7: Percentages of large-scale office supply volume by site type / by ward (23 wards of Tokyo) (25-29) Other wards 5, (59%) 62, (39%) 1,21, (8%) Former Japan National Railway sites: 15, (9%) 35, (21%) 1,16, (7%) 48, (3%) 97, (61%) 1,21, (8%) 29, (2%) Former Japan National Railway sites: 14, (9%) 6/6

Survey of Large Office Building Supply in the 23 wards of Tokyo '08

..2.4.6.8 1. Survey of Large Office Building Supply in the 23 s of Tokyo '8 April 11, 8 We, Mori Trust Co., Ltd. (Head Office: Minato-ku, Tokyo), have since 1986 undertaken continuous field surveys and