Accessibility, in all its facets, is becoming an increasingly important consideration for office tenants in the Global Cities. Facing increasing congestion and longer commuting times, employees’ needs to get into work easily, allied with businesses’ needs for client proximity, continues to drive many occupiers towards office destinations where excellent accessibility is a “must”.
Shinagawa railway station, in Minato ward, Tokyo, is a case in point. The ongoing and future renovation and regeneration of the area, is helping create one of the most accessible office sub-markets in Japan’s capital city – attracting developers, investors and occupiers alike.
The station is one of only two in Tokyo that serves the Tokaido Shinkansen (bullet train), providing easy access to the provinces of Japan. The station also offers direct links to both of Tokyo’s two main airports making it a convenient gateway to central Tokyo.
This accessibility has already led to a significant number of major tenants locating themselves in the area – with Microsoft, Mitsubushi Heavy Industries, Nikon and Deloitte Touche Tohmatsu all setting up large headquarters in the vicinity.
However, it is perhaps what is still to come which makes the area of so much interest. The Tokyo metropolitan government and East Japan Railway are putting significant effort into re-developing the whole area, with a major regeneration project covering 630 hectares around Shinagawa and Tamachi stations officially named an Urban Renewal Emergency Redevelopment Area. Plans include the redevelopment of a 15-hectare area of the former Shinagawa Depot Railway Yard – the most significant area of undeveloped land in central Tokyo, which will include office, hotels, residential and retail, supported by a new metro station set to open by 2020. This is all in anticipation of the opening of the linear Chuo Shinkansen maglev (magnetic levitation) railway, which will link Tokyo and Nagoya (the nation’s third largest city) in just 40 minutes when open in 2027.
Rents in central Tokyo have seen some of the most significant growth of any Global City over the last five years, with over 50% uplift. Grade-A office rents in Shinagawa currently sit at approximately 60-70% of those in Marunouchi, the heart of Tokyo’s CBD. While the Tokyo office market is toward the upper stages of the rental cycle, we expect this gap to start to close as the Shinagawa Station area becomes a true gateway to Japan. Grade-A office rents in Shinagawa currently sit at approximately 60-70% of those in Marunouchi, the heart of Tokyo’s CBD. While the Tokyo office market is toward the upper stages of the rental cycle, we expect this gap to start to close as the Shinagawa Station area becomes a true gateway to Japan.