Tokyo's office vacancy rate rose to a four-year high in May as companies in the capital slashed spending and jobs.
The rate increased for a 16th month to 6.96 percent, the highest since September 2004 and up from 6.79 percent in April, real estate brokerage Miki Shoji Co. said in a report released Thursday in Tokyo.
Vacancies may reach as high as 10 percent in Tokyo's main business districts in the next few years as the fallout of the economic slowdown continues, said Kimi Miyashita, an economic researcher at BNP Paribas in Tokyo. The economy shrank at a record 14.2 percent pace last quarter, revised figures from the Cabinet Office showed Thursday.
"The damage being inflicted on the market by the worsening economy and business environment is more serious than that caused by the glut in office supply in 2003," Miyashita said Wednesday in an interview.
The vacancy rate hit 8.57 percent in June 2003, the highest since Miki Shoji began compiling data in 2001. The survey covers main business districts in five of Tokyo's central wards — Chiyoda, Chuo, Minato, Shinjuku and Shibuya.