Empty Tokyo Offices Jump by Record as Virus Bankruptcies Rise

(Bloomberg) --

Vacancies at offices in central Tokyo rose by the most on record in July as the economic impact of the coronavirus pandemic continued to spread and virus-related bankruptcies in the capital reached 100.

Office vacancies in five of Tokyo's major business districts increased for a record fifth consecutive month, rising to 2.77% from 1.97% in June, real estate brokerage Miki Shoji Co. said on Thursday. It was the largest one-month gain on record, beating a high set in 2009 in the aftermath of the global financial crisis.

The data came on the same day as the announcement of the 100th company in Tokyo to go bankrupt as a result of the pandemic. Aquamarine, a maker of figurines and character goods, saw its orders drop amid the pandemic, having earlier experienced delays in shipments from China, research firm Teikoku Databank said. Nationwide, 400 companies have folded as a result of the outbreak, it said in a report on Monday.

Vacancies rose in all five central areas of Tokyo surveyed by Miki Shoji, with the jump most pronounced in Minato ward, home to the Shinagawa station hub, which saw a 1.19 percentage point increase. Rents, however, continued to rise. Shares in Mitsubishi Estate Co. extended their decline to 2.4% after the announcement.

Vacancies in Tokyo had fallen almost unrelentingly for the seven years since Prime Minister Shinzo Abe came to power in late 2012. That trend was halted by the pandemic, which has made prospective tenants reluctant to sign leases and raised questions worldwide about the future of the office.

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