Winter 2012, Vol. 37, Nos. 2&3
Abstract: Following the collapse of Japan’s economic bubble in 1991, the country’s economic growth slowed. Since then, the office market has suffered high vacancy rates, and there have been many cases where office buildings have had to be rebuilt. This trend is expected to increase in the midst of a precipitous decline in the size of the working-age population. When undertaking an office investment under such circumstances, it will be essential to select an investment property and the area in which such property is located with great care. In this article, the author identifies the signals used to determine market selection with respect to an office investment, and distinguishes areas that will continue to maintain strong fundamentals and potential value in the office investment market going forward. While there are limitations to applying these analyses to other cities with strict land use regulations, this analysis of the Tokyo office market, where population decline and aging are progressing at the fastest rate, can serve as an important guide.