Introduces “Grade A-Minus” and “Grade B” for greater analytical depth
Beginning Q1 2014, CBRE switched from using asking rents to using assumed achievable rents to provide data that better reflects the market situation. CBRE has also updated its office categories beyond Grade A, adding “Grade A-Minus“ (for Tokyo only) and “Grade B”. This will give a clearer view of changes in market trends while also helping to identify demand drivers in different cycles. The new categorization will begin with the Q2 2014 edition of the CBRE Japan Office MarketView.
Grade A offices are categorized as large, high-specification buildings located primarily in Tokyo’s central five wards and major districts in Osaka and Nagoya. Grade A-Minus offices are relatively large buildings located across Tokyo and account for the largest proportion of the market in terms of area. Grade B offices are medium-sized buildings and are often occupied by mid-sized corporations and the group companies of major corporations.
With regard to Tokyo office vacancy rates, Grade B assets were the first to hit their peak and begin their downward trend, while Grade A-Minus lagged, mostly affected by new Grade A building supply in the last couple of years. That being said, Grade A-Minus vacancies have started to catch up over the last quarter, suggesting that demand has now shifted from a) consolidation for cost-cutting and b) location and/or facilities upgrades, and is now being driven by tenants relocating to larger premises or taking additional spaces.
For further market trend details by Grade, please refer to the ViewPoint report, “New Categories for the 3 Major Markets” below.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2014 revenue). The Company has more than 70,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 400 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.