The tables on this page are lists of transactions of office buildings, during the third quarter of 2009 in order of lowest cap rate, based on our estimate. Lists covering 2008 to 2009 period are only available for the subscribers.

The data is based on the transaction analysis that has been conducted every quarter by the Nikkei Real Estate Market Report. The net operating income used for calculating the cap rates is based on an estimation made using our own method and reflects the standard closing rent and vacancy rate for each area at the time of the transaction.

The cap rates assume that all floors are office floors and that new tenants were contracted for empty buildings. The prices of the properties and transaction prices per m2 of rentable floor space are also provided for reference.

The survey covers properties for which prices and floor spaces were disclosed. Buildings that are clearly believed to have been acquired for redevelopment are essentially excluded from the survey.

Note: Expected cap rates are based on the Japanese Real Estate Investor Survey, a questionnaire survey by appraisal firm Japan Real Estate Institute.

This graph above indicates changes in estimated cap rates for office buildings sold and purchased in central Tokyo in chronological order. Looking at changes in average cap rates in five central Tokyo wards, they have remained flat over the past four years after marking a drop of 4.1% in 2005, a year of intense acquisition competition.

Investors' expected cap rates have been dropping, following slightly behind market changes, with the gap between them increasing since the beginning of 2008. How much market cap rates will increase as a result of price adjustments is something to keep an eye on.

Note: Cap rates are estimated with the following formulas, considering net income (NOI) under the assumption that vacant buildings are occupied with new tenants. Cap rate (%) = estimated rent based on closed contracts in the neighborhood × rentable floor space × average office building occupancy rate in the area × 12 months × (100% - expense rate) ÷ selling price × 100. When the rentable floor space is unknown, the total floor space is multiplied by a coefficient assigned for each level of total floor space. The coefficient is set as follows: 30,000 m2 or more = 57%, 20,000 m2 or more and less than 30,000 m2 = 64%, 10,000 m2 or more and less than 20,000 m2 = 65%, 7,000 m2 or more and less than 10,000 m2 = 69%, 3,000 m2 or more and less than 7,000 m2 = 72%, 2,000 m2 or more and less than 3,000 m2 = 78%, and less than 2,000 m2 = 84%. The expense rate is set as follows: five central Tokyo wards = 27%, other greater Tokyo areas = 33%, regional districts = 37%, and buildings completed within the past five years = -7%. “Own use” in the Purpose column refers to buildings that are entirely or partially used by the buyer. The Floor Space column basically refers to the total floor space, except for “(CO)” which refers to the floor space for the compartmentalized ownership of the transaction and “(CS)” which refers to the floor space for the co-ownership share. The Number of Floors column refers to stories “above ground / underground.” The Price per m2 column refers to the selling price per m2 of rentable floor space.