FukuokaOffice MarketSummary
Robust demand decrease vacancy rate despite large supply
Economy
TheMarchTankanSurveyforKyushuand Okinawaregionshowedthatbusiness sentimentdroppedto7pointsfrom17forlarge manufacturersandto32pointsfrom36forlarge non-manufacturers.
DemandandSupply
Netabsorptiontotalled+23,000sqmin1Q24. Therewasaseriesofpositiveactivityby companiesforbusinessexpansion,including relocationsexpansioninthesamebuildings, andconsolidationoflocationsthroughbuilding upgrades.
Onenewprojectenteredthemarketin1Q24, namelyConnectSquareHakata.The12-storey buildinghasaGFAof21,000sqm,withoffice spaceonthe2nd-3rdfloorsoccupiedbythe Hakataregionalofficetaxationdivisionandon 4th-12thforgeneraltenants.
Physical Indicators
(net) Completions FutureSupply VacancyRate
For2019 to2023,take-up,completionsandvacancyrateareyear-end annual. For2024,thesearequarter-end.Futuresupplyis foryear-endof 2024.
Source:JLL
Thevacancyratestoodat5.9%in1Q24, decreasing60bpsq-o-qand90bpsy-o-y. Vacancyratedeclinedrobustlyduetohigh occupancyinanewcompletionofthequarter andtenantsfillingseverallargeexisting vacancies.
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May 2024 -1 1 3 5 7 -10 10 30 50 70 2019 2020 2021 2022 2023 2024 Percent Thousand sqm
Q1 2024
Take-up
Investorspositivelycontinuetoseekopportunities
AssetPerformance
AveragemonthlygrossrentpertsubowasJPY 20,049pertsubopermonthattheendof1Q24, increasing0.4%q-o-qand1.0%y-o-y.The upwardwasduetosomelandlordsofexisting buildingwithfewervacanciesraising,aswellas anewcompletionwithabovethemarket average.
Capitalvaluesincreased1.1%q-o-qand0.7% y-o-yin1Q24,reflectingtherentalincreases. Caprateswereflat.
InvestmentMarket
Theofficeinvestmentvolume inFukuokaPrefecturein1Q24was JPY33.5billion,anincreaseof37.5%y-o-y. TherewerenotransactionsforGradeAoffice buildingsduringthequarter.
Outlook
AccordingtotheOxfordEconomicsforecastin March,realGDPinFukuokaCityisexpectedto growby1.0%in2024and0.6%in2025. Downsideriskstodomesticdemandinclude risesofrawmaterialpricesandlabour shortages.
Intherentalmarket,althoughdemandfor locationimprovementsandupgradesbasedon businessexpansionislikelytocontinue, projectednewsuppliesfortheendoftheyear areexpectedtobecompletedwithlarge vacanciesasrentsareneartheupperendof themarket.Withlooseningsupply-demand balance,landlordswiththebuildingsofupper rentrangearelikelytolowerrents.
Intheinvestmentmarket,althoughinvestors areseekingopportunitiestoacquire competitiveassets,therewillbelimited transactionsduetofewsellingassets.
©2024 JonesLangLaSalleIP,Inc.Allrightsreserved. 2 | Fukuoka Office Market Summary
FinancialIndices Source:JLL,Q12024 Dottedlinesindicatenear-termoutlook Indexbase:4Q19=100 Source:JLL 70 80 90 100 110 120 130 4Q19 4Q20 4Q21 4Q22 4Q23 4Q24 Index RentalValueIndex CapitalValueIndex
Property Clock
KeyPerformanceIndicators Occupationalmarket
Source:JLL,Q12024
©2024 JonesLangLaSalleIP,Inc.Allrightsreserved. 3 | Fukuoka Office Market Summary
Investmentmarket
1. VacancyrateandrentsrefertoFukuoka’sGradeAofficemarket.The definitionofGradeAisasbelowthetable. 2. PropertyclockbasedonrentsforGradeAspaceinCBD. 3. InvestmentvolumereferstoFukuokaprefecture’sofficedirect commercialrealestateinvestmentvolume
Note:
Vacancyrate Q-o-Q Y-o-Y Fukuoka GradeAoffice 5.9% -60bps -90bps Rents pertsubopermonth Q-o-Q Y-o-Y Fukuoka GradeAoffice JPY 20,049 +0.4% +1.0% Investment volume Q-o-Q Y-o-Y Fukuoka office Q12024 JPY33.5 billion NA +37.5%
Aofficedefinition Area DesignatedasofficeareabyJLLin Fukuoka
Glossfloorarea 15,000 sqm(4,538tsubo)ormore Typicalfloorplate 600sqm(181tsubo)ormore BuiltYear 1990 ornewer
Fukuoka Grade
2-kus(Chuo,Hakata)
jll.com
JonesLangLaSalleK.K.
Tokyo Headquarters KioiTower, Tokyo Garden Terrace Kioicho 1-3Kioi-cho Chiyoda-ku, Tokyo 102-0094 +81343611800
FukuokaOffice
DaihakataBldg. 2-20-1Hakata-ekimae, Hakata-ku,Fukuoka-shi Fukuoka812-0011 +81922336801
OsakaOffice Nippon Life
Yodoyabashi Building 3-5-29KitahamaChuo-ku, Osaka541-0041 +81676628400
NagoyaOffice
JPTowerNagoya 1-1-1Meieki, Nakamura-ku,Nagoya-shi
Aichi450-6321 +81528563357
Contact
TakeshiAkagi HeadofResearch Research -Japan takeshi.akagi@jll.com
TakeshiYamaguchi ResearchDirector Research -Japan takeshi.yamaguchi@jll.com
YukiMatsumoto Manager Research -Japan yuki.matsumoto@jll.com
About JLL
For over 200 years, JLL (NYSE: JLL), a leading global commercial real estate and investment management company, has helped clients buy, build, occupy, manage and invest in a variety of commercial, industrial, hotel, residential and retail properties. A Fortune 500® company with annual revenue of $20.8 billion and operations in over 80 countries around the world, our more than 108,000 employees bring the power of a global platform combined with local expertise. Driven by our purpose to shape the future of real estate for a better world, we help our clients, people and communities SEE A BRIGHTER WAYSM. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information,visit jll.com
AboutJLLResearch
JLL’sresearchteamdeliversintelligence,analysisandinsightthrough marketleadingreportsandservicesthatilluminatetoday’scommercialreal estatedynamicsandidentifytomorrow’schallengesandopportunities.Our morethan550globalresearchprofessionalstrackandanalyzeeconomicand propertytrendsandforecastfutureconditionsinover60countries, producingunrivalledlocalandglobalperspectives.Ourresearchand expertise,fueledbyreal-timeinformationandinnovativethinkingaroundthe world,createsacompetitiveadvantageforourclientsanddrivessuccessful strategiesandoptimalrealestatedecisions.
