Monthly office vacancy rate in Tokyo's main business districts 2020-2024

In September 2024, the vacancy rate for office space in Tokyo's five central business districts reached 4.61 percent. The office vacancy rate in the capital's central business districts reached a low of 1.49 percent in early 2020, but increased significantly during the coronavirus (COVID-19) pandemic. 

Impact of COVID-19 on workstyles in Japan

By international comparison, businesses in Japan have been known for a rather slow adoption of new work styles such as telework. Japanese corporate culture has been cited as one of the reasons for this. The outbreak of the coronavirus pandemic, however, resulted in a sudden increase in companies offering telework and sparked a debate about new forms of work across Japan. The changes were especially apparent among large corporations, many of which announced plans for a shift to permanent remote work and reduction of their office space.

Flexible office space

The increase in companies offering teleworking is likely to have an impact on the demand for flexible offices and coworking spaces. Operated by so-called third-party providers, flexible offices represent an alternative to traditional leasing arrangements for office space. While Japan’s flexible office market is comparably small, it was forecast to expand significantly in the coming years, and the number of flexible offices in Tokyo’s 23 wards has seen a constant increase.