New Bldgs In Central Tokyo, Osaka Fully Rented Before Completion

July 07, 2005
New Bldgs In Central Tokyo, Osaka Fully Rented Before Completion

TOKYO (Nikkei)--Many large buildings under construction in central parts of Tokyo and Osaka have fully rented out their office and other space before being completed.
A major factor behind the robust demand is the ability of manufacturing firms to expand their office space by using funds that have become available since they ended their restructuring efforts.
Another factor is demand from Internet-related businesses seeking to set up offices in urban centers.
Nihombashi Mitsui Tower, a building being constructed by Mitsui Fudosan Co. in Tokyo's Chuo Ward, has already found tenants for all its space prior to its scheduled opening in late July. Toray Industries Inc. (3402)will relocate its head office to the building.
Property management firm Maruito Co. expects the Maruito OBP Building, now under construction in Osaka Business Park, to start operations fully occupied.
A major building owned by Yasuda Real Estate Co. will open in Tokyo's Nihombashi Hamacho district in September, with all its space occupied. Kureha Chemical Industry Co. (4023） will move its head office to the building, accompanied by some of its affiliated firms.
The entire Ginza Mitsui Building, which Mitsui Fudosan will open in Tokyo's Ginza area in August, will be occupied by Ricoh Co. (7752) a major office equipment manufacturer.
New buildings slated to be built in central Tokyo over the next five years are projected to add a total of 740,000 sq. meters of space per year to the commercial rental market, only about 30% of the figure in 2003.
"In 2003, most potential tenants selected an office building only after actually looking at it after completion," said an official at Mori Building Co. Now, however, many firms start to negotiate with property developers one to two years before the buildings are finished because of the growing feeling that new office buildings are likely to be in short supply, industry analysts said.
Fuji Photo Film Co. (4901)　and Fuji Xerox Co. have already decided to move into Tokyo Midtown, a commercial complex due to open in 2007 on a former Defense Agency site in the central Tokyo district of Roppongi.
Interest in new buildings in urban centers is also mounting among midsize companies, with some of them opting to rent space in large buildings in order to have all of their administrative sections located on the same floor.

(The Nihon Keizai Shimbun Thursday evening edition)