Fukuoka
Fundamentals
• Robustdemand isdriven byvariousindustries,including information andcommunications
• Vacancyratesfallforthefirsttimeintwoquartersamidlower vacanciesinnewbuildings
• Rents increasefortheseventhstraightquarter;capitalvaluesexpected tostabiliseamidslowingrentgrowth
TheKyushu-OkinawaTankansurveyinMarch2025was30,showinga 4-pointriseinDIforbusinesssentiment foralllargeenterprises; manufacturing improved by10pointsto29,whilenon-manufacturing declined by2pointsto30.Netabsorption totalled6,000sqmin1Q25, indicating anincreaseinleasedareadespite smallervolumes compared toprevious terms thatweredriven bymajornewsupply. Relocation demand camefrom industriesincluding theinformation andcommunications, transportation andprofessional services.
Nonewsupplycameintothemarketin1Q25.Thevacancy rate dropped to5.9%in1Q25,decreasing 110bpsq-o-q andwas unchanged y-o-y. Tenjin, Akasakaand YakuinsubmarketandGion, GofukumachiandNakasusubmarketsawreduced vacanciesinnew buildings,lowering thesubmarkets’vacancyrates.
Rents averaged JPY21,247pertsubo,permonth in1Q25,increasing
1.9%q-o-q and6.0%y-o-y. Rent growthwasobserved acrossthe marketdriven byexistingbuildings,aslandlordsadjustedrentlevels upwardsinresponse torobustdemand. Capitalvaluesincreased 3.9%q-o-q and8.7%y-o-y, reflecting rentgrowthamidstable investment yields.NoGradeAofficetransactionsoccurred inthe quarter.
Outlook
Oxford Economics forecastsFukuokaCity‘srealGDPgrowthfor2025 at0.7%inMarch,aslightdowngrade fromDecember. Risksinclude theimpactoftradepoliciesinforeign economies.
Intheleasingmarket,robustdemand isexpected tograduallyabsorb majorsupply,leading togradualvacancy ratereductions andstable renttrends. Intheinvestment market,investor interestishigh,but stableyieldssuggestpricesto stabiliseandmirrorrenttrends.
Stage inrental cycle
Rents stable
Note: FinancialandphysicalindicatorsareforFukuoka’sGradeAofficemarket. DataisonaNLAbasis.
FukuokaOffice MarketDynamics Q12025
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Fukuoka
FukuokaDaimyoGardenCity 2-6-50Daimyo, Chuo-ku,Fukuoka-shi
Fukuoka810-0041
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Nagoya
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Formoreinformation,pleasecontact
YutoOhigashi
Senior Director
Research-Japan
yuto.ohigashi@jll.com
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