Demand is high in the Tokyo commercial fit-out market – too high for the amount of Grade-A stock available in the city. Japan, and Tokyo in particular, remain very attractive locations for foreign companies, particularly those in the technology space, fuelled by the country’s highly educated population, drive for increased AI adoption, and data-centre boom.

Tokyo ranks just outside the top ten most-expensive fit-out markets in our index – at an average of JP¥729,406 per m2 for high specification – reflecting significant inflationary pressure. This is being driven by currency challenges, but also rising labour costs as a result of Japan’s ageing population and difficulty replacing retiring workers. There is now a very proactive effort for the country to draw in labour from other markets, especially in construction, but this will take some time to have an impact.