Money News

Virus-hit Tokyo's office vacancy rate worsens in June, broker says

An IT engineer, who does not want to be identified, poses against a window where Tokyo's office buildings are seen after having an interview with Reuters in Tokyo, Japan, December 7, 2016. Picture taken on December 7, 2016. REUTERS/Kim Kyung-Hoon/Files

TOKYO (Reuters) - Tokyo’s office vacancy rates have worsened for a fourth straight month as the coronavirus pandemic pushed some tenants to reduce office space and delay relocations, a Japanese broker said on Thursday.

The average in the Japanese capital rose to 1.97% in June from 1.64% from May, said Miki Shoji, a company that tracks nationwide office vacancy rates and rents.

“Office relocations and signing new contracts slowed down due to the impact of the coronavirus outbreak,” it said in a statement. “There were also cancellations of contracts as tenants cut spaces.”

Many employees started working from home after the virus outbreak, spurring companies to question if they required large office spaces.

IT solutions company Fujitsu Ltd has become the latest example of firms giving up office space, since it allows flexible hours for roughly 80,000 workers in Japan. [nL4N2ED0N1]

Demand for Tokyo’s office space had grown until the beginning of this year as companies expanded operations and tried to move to newer offices to attract new hires.

Tokyo’s office vacancy rate fell to 1.49% in February, its lowest since Miki Shoji started compiling monthly data in 2002.

(Interactive graphic tracking global spread of coronavirus: open in an external browser.)

Reporting by Junko Fujita; Editing by Clarence Fernandez