(April 11): Tokyo office vacancies dropped to a three-year low in March, a sign that the commercial real estate market in the Japanese capital is withstanding the slump afflicting major cities around the world.

The rate in Tokyo’s five central business areas fell to 5.47%, the lowest since March 2021, according to real estate broker Miki Shoji Co, which compiles one of the most-watched measures of commercial office use in the city. Rents have also ticked up after falling through most of 2023 — rising every month so far this year for existing buildings.

Companies in Tokyo moved into better locations in the central business districts or signed contracts for bigger spaces, pushing down the vacancy rate, Miki Shoji said in the report. The figure includes space that has yet to be emptied.

Tokyo has avoided the reckoning in large cities worldwide that are suffering from record office vacancies and plummeting building valuations since the pandemic. Remote work hasn’t gained much traction in Japan, where smaller living spaces and a stricter corporate culture have people continuing to frequent the office.

More than three-quarters of workers in the Tokyo metropolitan area ranging from those in their 20s to 60s were working full-time at the office or in a hybrid-set up, according to a Colliers survey in February.

The opening of several new office towers at the end of 2023 was expected to push up vacancy rates in Tokyo, but the supply has been absorbed well, according to a report from Savills plc. “Improvements in the first half of 2024 will likely be steady,” it said.