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MARKET OVERVIEW
TOKYO
BANKING AND FINANCIAL SECTOR SUMMARY
Key Banking and Financial Services Sector Lease Transactions – 2016
PROPERTY
SF
TENANT
TRANSACTION TYPE SUBMARKET
Otemachi Financial City Grand Cube 310,200
Mitsubishi UFJ Morgan
Stanley Securities
Lease
Otemachi,
Chiyoda-ku
Sophia Tower
142,300 Aozora Bank
Lease
Yotsuya, Shinjuku-ku
Sumitomo Fudosan Shinjuku Garden
Tower
106,700 JCB
Lease
Takadanobaba,
Shinjuku-ku
Ginza Mitsui Building
90,000 JA Mitsui Leasing
Lease
Ginza, Chuo-ku
Tri-Seven Roppongi
55,000 Fidelity Japan Holdings
Lease
Roppongi, Minato-ku
Tokyo Garden Terrace Kioicho Kioi
Tower
106,000 MetLife Inc.
Lease
Akasaka, Minato-ku
Key Banking and Financial Services Sector Sale Transactions – 2014/2016
PROPERTY
SF
BUYER
PRICE
(US$ MIL)
PRICE
(US$/SF)
SUBMARKET
Otemachi Tower (30% of
oce portion)
368,140 Mizuho Bank
1,733
4,707
Otemachi, Chiyoda-ku
Former Mizuho Bank
Headquarters Building
797,510
Mizuho Financial
Group
1,390
1,743
Marunouchi, Chiyoda-ku
Banking and Financial Sector Trends
The financial sector in Japan has been healthy
during and after the global financial crisis (GFC),
unlike the financial sectors of other nations.
Backed by the recent economic recovery
associated with the stock market improvement
over the past few years, most local banks and
securities firms have increased headcount. On the
other hand, foreign firms have become less active
after the GFC. Most recently, Citigroup shrank
its exposure, selling its retail banking operations
to Sumitomo Mitsui Banking Corporation, and
its credit card service business to Sumitomo
Mitsui Trust Bank Japan in 2015. Major local
banks and securities firms normally own their
headquarters in prime locations of the Otemachi/
Marunouchi area, while other local institutions
and foreign companies often lease their premises.
Recently, we have seen a ‘flight to quality’ among
occupiers as some companies have moved to
better buildings in superior locations to suit their
business continuity planning needs.
Outlook, Opportunities & Strategies for Occupiers
The introduction of negative interest rates in early 2016 has impacted
the financial performance of banks, and may lead to weaker oce
demand going forward. Given that the current vacancy rate is below
5.0%, securing new oce spaces with a wider floorplate in the Central
Business District (CBD) market has become more dicult. Tenants
continue to prefer flexible terms, including space reduction and early
termination, when signing contracts.
In line with the outlook and focus on cost reductions for many
foreign financial firms, we are seeing many multi-national
occupiers in the finance sector seek ways to reduce total
occupancy costs, whether through seeking possible sublease
opportunities in their fixed term leases, or space planning
initiatives driven by mandates to reduce footprints. Given
their previously healthy conditions, local financial firms
have not been as aggressive on the above measures; however,
they may adopt a “wait and see” stance as a result of ongoing
monetary policy initiatives and associated cost pressures.
- Leon Ikeda, Senior Manager, Tenant Advisory Group Japan
NA
114.28
6.2%
% Occupancy of
Financial Sector
Prime Rent
(USD/Sf/Year)
Rent Growth
(YOY in local)
48 ASIA PACIFIC BFSI OUTLOOK 2017