Office rents on the rise as Shibuya returns as Japan’s IT hub

The major redevelopment projects currently underway around Shibuya Station are, as expected, pushing up office rents. The announcement that Google Japan will relocate their head office to the recently completed Shibuya Steam building next year has heralded the return of Shibuya as Japan’s ‘Bit Valley’ and has been the driving force behind the district’s booming office market.

Various IT-related ventures are following suit, relocating or setting up new offices around the station. The first stage of the Shibuya Station area redevelopment was the 34-storey Shibuya Hikarie building, completed in 2012. DeNA, an e-commerce site provider with 2,400 employees, moved their head office to the Hikarie building.

IT recruiter Leverages Co., Ltd. will move their head office to the Shibuya Scramble Square East Building in Autumn 2019. Shibuya Scramble Square East is a 229m tall, 47-storey office tower located above Shibuya Station. It is due for completion next year. Social media company mixi is also relocating their head office to the new building. Media company CyberAgent, Inc. will take up 5 floors in Shibuya Scramble and 13 floors in nearby Abema Towers.

Office rents

Average monthly office rents in Shibuya are currently around 6,650 Yen per square meter (30,000 Yen per Tsubo), but can go as high as  15,130 Yen/sqm (50,000 Yen per Tsubo) for quality office space in premium locations.

According to office researcher and brokerage Miki Shoji, in October 2018 the average office vacancy rate in Shibuya was just 0.92%, down 1.01 points from last year and the lowest vacancy rate across the central five business districts. Vacancy rates were as high as 10.06% in January 2011. Miki Shoji reports that office rents in Shibuya have increased by 4.6% over the past 12 months.

Average office rents across central Tokyo’s five business districts have recorded year-on-year increases for the past 57 months in a row. The average vacancy rate of 2.33% in September was the lowest level seen since January 2002.

Shibuya area projects:

  • Shibuya Cast: A 16-storey mixed-use office, retail and residential building completed in 2017. Located a 5 minute walk from Shibuya Station.
  • Abema Towers: A 111m tall, 21-storey mixed use building located alongside near Tokyu Hands. The top 4 floors will be the La Tour Shibuya II high-end luxury rental apartments. Completion is scheduled for mid-2019.
  • NHK Broadcasting Center: There are discussions to rebuild the broadcasting center by 2025.
  • Miyamasuzaka Apaato Building: Built in 1953, this was Japan’s first high-rise condominium. Located adjacent to Shibuya Hikarie. The building has been demolished and will be replaced with a 15-storey mixed-use retail and residential building to be completed in 2020.
  • Shibuya Ward Dogenzaka 2 Chome Redevelopment: A 120m tall retail, office and hotel building development by Don Quijote Holdings. Completion in 2022.
  • Shibuya Ward Office Redevelopment: The government office buildings are in the process of being rebuilt, with opening scheduled for early 2019. One section of the site will be a 39-storey leasehold apartment building called Park Court Shibuya The Tower with apartments to be delivered to buyers from early 2021.
  • Miyashita Park: The strip of land that runs between the Yamanote Line train tracks and Meiji Dori Street will be redeveloped by Mitsui Fudosan. The new park will include retail space as well as a 17-storey hotel on the northern end. Completion is expected in 2019.
  • Shibuya Parco Building Redevelopment: A 20-storey, 110m tall retail and office building is going to replace the old Parco department store just down the street from the Shibuya ward office. Completion is expected in 2019.
  • La Tour Shibuya Jinnan: A high-end luxury rental apartment building located to the east of the Shibuya Ward Office. The 22-storey building has 54 rental apartments ranging from 73 ~ 130 sqm in size. Completion is scheduled for January 2019.

Sources:
Miki Shoji
Wedge, October 12, 2018.
The Shibuya Keizai Shimbun, October 2, 2018.

91 total views, 3 views today