R&D Centers Are Driving Demand for Office Space
Yokohama's all-grade rent expected to rise 10.5% over next two years
In Q1 2018, the Yokohama office vacancy stood at 4.9%. In Q1 2019, only a year later, it plunged 3.3 points to 1.6%. The demand for office space in the area has been driven by R&D centers. With investment in R&D rising again, post-GFC manufacturers, particularly those related to IoT, have been newly opening or moving into Minato Mirai to set up their bases.
What makes Yokohama a desirable location? Three main reasons:
1. Attractive to young talent
2. Continuous supply of large new buildings
3. Minato Mirai offers strong cost benefits compared to Tokyo
Yokohama is an attractive investment market - Yokohama All-Grade rents forecast to rise by 10.5% over next two years
Yokohama All-Grade rents rose by 4.6% during the 12 months leading up to Q1 2019. When looking at nationwide office rental growth for the next two years (to Q1 2021), Yokohama ranked among the top three at 10.5%. This future rental upside has made the city an increasingly attractive market for investors.