Morgan Stanley (MS:US) signed an office lease with Mitsubishi Estate Co. earlier this month to move its Japan operations back to Tokyo’s Otemachi business district amid lower rents.
Morgan Stanley will move to Otemachi Financial City South Tower, in an area neighboring the Imperial Palace, from Tokyo’s Ebisu district in the first quarter of 2014, the New York-based company said in an e-mailed statement. Chika Kanamori, a spokeswoman at Mitsubishi Estate, confirmed the signing of the lease in an e-mail.
Morgan Stanley is taking advantage of lower office rents as the vacancy rate in Tokyo rose to a record high earlier this year, while rents in the capital reached a record low in November, according to Miki Shoji Co., a Tokyo-based office brokerage company. Otemachi and Marunouchi, both around Tokyo Station, are home to the local units of financial companies including JPMorgan Chase & Co. and Citigroup Inc.
“Our decision to pursue a new space in Otemachi Financial City was driven by the rising technological demands of the business, combined with the attractive conditions for tenants of prime commercial locations,” Morgan Stanley said in the statement. “We believe the relocation will be another positive development for Morgan Stanley’s franchise in Japan.”
Sapporo Holdings Ltd. (2501), the landlord of Yebisu Garden Place, where the New York-based company’s Tokyo office is currently located, has been notified that Morgan Stanley will be moving out, said Yuki Hattori, a Tokyo-based spokesman of Sapporo.
“We have gotten a number of inquiries about our building already,” said Hattori. “We have plenty of time to look for new tenants.”
Morgan Stanley moved to Ebisu from Otemachi in 1996, according to the company’s Japanese website. Ebisu is a mainly residential neighborhood of boutiques and restaurants, whose main tourist attraction is the area around Yebisu Garden Place, where Morgan Stanley is currently based and which also houses the headquarters of Sapporo Breweries.
Otemachi Financial City, which was completed in October, consists of two office towers developed and owned by Mitsubishi Estate, NTT Urban Development Corp. and Tokyo Tatemono Co. A unit of JFE Holdings Inc. is another confirmed tenant for the south tower, Mitsubishi Estate said.
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