Monday, May 26, 2008

Japanese real estate firms plan to increase their property rent in central Tokyo

The big time real estate firms in Japan are looking forward to increase their property rents in central Tokyo. Real estate companies like Mitsui Fudosan (TYO:8801), Mitsubishi Estate (TYO:8802),Mori Trust (TYO:8961) are talking with their tenants to raise office rents. Till now, property rent in Japan was very low which helped the real estate companies survive through tight credit crunch and strict apartment building codes. As the country’s economy is recovering, many companies are moving into big offices. International Herald Tribune reports:

Mitsui Fudosan, the largest real estate developer in Japan, said Monday that it was in talks with tenants to raise office rents in central Tokyo by an average 10 to 15 percent.

The second-largest developer, Mitsubishi Estate, also said it was in talks with tenants to raise office rents in the Marunouchi area of central Tokyo by 15 to 20 percent.

Another major developer, unlisted Mori Trust, said it was preparing to raise office rents in the Minato district in central Tokyo by an average of 20 percent.The office vacancy rate in Tokyo's 23 wards stood at 2.1 percent in April, the lowest since the burst of the Japanese asset-inflated bubble economy in 1990, according to Ikoma Data Service System, a research firm specializing in the market for office buildings.

According to the latest data from Ikoma Data Service, the average rent of 3.3 square meters in Tokyo’s five central wards in April was ¥15,120. This is 12 percent higher from ¥13,530 of 2007. The office space in Tokyo is very tight. The real estate firms are picking up the opportunity of the recovering economy.

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International Herald Tribune