Demand for office space has Tokyo rents soaring
With more foreign companies knocking on Japan's door for business, demand for office space has pushed Tokyo land prices to record highs. ``The situation is first-come, first-served,'' says Toshio Nagashima of Mitsubishi Estate Company, which has some 1,600 clients on a waiting list for floor space in its buildings.
Though the total floor space in Tokyo's downtown areas has doubled in the past 10 years, supply cannot catch up with the rapid demand. The vacancy rate of office buildings in three central business wards -- Chiyoda, Chuo, and Minato -- fell to 0.8 percent in 1982 for the first time, and it dropped to 0.4 percent in 1984.
Real estate agents say that being located outside these districts, where information, people, and money are concentrated, makes it hard to expect good business.
Of 660 inquiries made to Mitsui Real Estate last year, 220 were from foreign companies. The latest Ministry of Finance figures show that the number of foreign companies buying space in Tokyo rose from 412 in 1982 to 568 the following year. Most of those are in such businesses as computers, finance, and services.
Along with office space, foreign companies are seeking Western-style apartments for foreign workers, real estate agent Tatsuo Yamazaki says. Rents for newly built apartments now reach $10,000 a month.
Since the supply in the central areas has reached ``the saturation point,'' residential areas for foreigners are spreading into adjacent wards such as Shibuya, Meguro, and Setagaya.
Land Agency officials worry that business districts' land price increases are extending into adjacent residential areas. The price rises surprise officials, because it was once believed that advanced communication technologies would promote decentralization.