Colliers Japan Publishes Q1 2026 Office Market Report for Grade A Offices in Tokyo’s Five Central Wards

Colliers International Japan K.K. (Representative: Masahiro Tanikawa; headquarters: Chiyoda-ku, Tokyo; NASDAQ and TSX: CIGI; hereinafter Colliers Japan), a major comprehensive real estate consulting services provider, has published its “Office Market Report | Tokyo Central 5 Wards, Grade A Office | Q1 2026.” The report analyzes trends in the Grade A office leasing market in Tokyo’s five central wards during the January-March 2026 period. Rents rose sharply by 5.8% quarter on quarter amid limited vacancies. In Q1 2026, new supply totaled 36,300 tsubo, while net absorption was 32,800 tsubo, meaning demand was slightly below supply. As a result, the vacancy rate stood at 1.4%, up 0.1 percentage point from the previous quarter, but remained at an extremely low level. Against this tight supply-demand backdrop, average rent rose to JPY 38,400 per tsubo, up 5.8% quarter on quarter. This was driven by higher leasing terms, mainly among major real estate owners, in line with the change of fiscal year. Free rent periods have also continued to shorten, further widening the increase in effective rents. Hiring competition continues to drive demand, while a lack of vacancies constrains relocations. Supported by solid corporate earnings, demand remains strong for office environment improvements aimed at strengthening recruitment capabilities and employee retention. However, vacant inventory in the market is extremely limited, making it difficult for tenants to compare multiple relocation options. While demand remains firm, the depletion of available space is also restricting the completion of transactions. Rising interior construction costs and longer construction periods are additional risk factors associated with relocations. Tight market conditions are expected to continue for the time being as demand concentrates on properties under development. In Tokyo, more than 100,000 tsubo of new Grade A office supply is scheduled annually through 2030. However, because there is almost no sizeable vacancy in existing stock, tenant pre-commitments for properties under development are occurring earlier. Properties scheduled for completion at least through 2027 are expected to be delivered with occupancy close to full, and the tight market environment in Tokyo’s five central wards is expected to persist, with rents maintaining an upward trend. Rent growth is accelerating further in the premium grade segment, which consists of top-class properties. Among Grade A offices, particularly high-quality premium offices are seeing even more pronounced supply-demand tightness. Average rent reached JPY 49,100 per tsubo, up 10.6% quarter on quarter, while average effective rent reached JPY 46,800 per tsubo, up 14.6% quarter on quarter. Tenants’ “flight to quality” is intensifying, and rent growth is expected to continue at a pace above the Grade A average. The full “Office Market Report | Tokyo Central 5 Wards, Grade A Office | Q1 2026” is available via the report download link. About Colliers: Colliers (NASDAQ, TSX: CIGI) is a global diversified professional services and investment management company operating in commercial real estate, engineering, and investment management. Backed by more than 30 years of sustained growth and a stable earnings base, the company is expanding high-value businesses that provide essential services throughout the full asset lifecycle. Under its distinctive partnership-oriented management philosophy, Colliers focuses on developing outstanding leaders and maintaining an entrepreneurial corporate culture. Through internal share ownership, it aligns interests with shareholders and creates sustainable value. With annual revenue of USD 5.7 billion, approximately 24,000 professionals, and USD 109 billion in assets under management, Colliers strongly supports the success of clients, investors, and employees around the world. Further details are available at colliers.com/ja-jp, the official Japanese website, as well as on X, formerly Twitter, at @ColliersJapan, and on LinkedIn. About Colliers Japan: Colliers Japan has more than 100 professionals across its Tokyo and Osaka offices, providing domestic and international investors, owners, and tenants with services including office leasing, industrial leasing, leasing management, capital markets, investment services, project management, design build, workplace consulting, consulting advisory, real estate appraisal, and hotels and hospitality advisory. For the latest information on Colliers, please visit the company website: https://www.colliers.com/ja-jp/about. LinkedIn: https://www.linkedin.com/company/colliers-international/. X, formerly Twitter: https://twitter.com/Colliers. Instagram: https://www.instagram.com/colliers_japan/. Facebook: https://www.facebook.com/ColliersJP/. YouTube: https://www.youtube.com/user/ColliersIntlAsia.