Tokyo's Office Stock Vulnerable in a Major Quake

Back to Contents of Issue: January 2005

Tokyo's Office Stock Vulnerable in a Major Quake No municipal vision, few buildings meeting the latest safety

by Arthur Dylan

Seismologists assert a large quake will strike central Tokyo. Will it plunge the capital of the world's second largest economy and the world's largest rental-office- building market into chaos that will make New York's 9/11 look like a tea party? Or is Tokyo prepared for the big one?

Earthquake Building Regulations were established in 1981. About half of the total stock in the central business district (CBD) was built after 1981 and hence seismic resistant. Yet class-A buildings account for only around 6 percent of the total office stock. Buildings in this class were constructed compliant with all the latest earthquake resistant safety construction codes. Most large office buildings completed in Tokyo within the past 10 years are class-A. Older buildings may qualify if their renovations bring them up to equivalent specs.

Miki Shoji Co., Ltd., Japan's longest-established office lease brokerage firm, reports what one would expect: class-A buildings have been leasing-up strongly as office tenants relocate from older buildings. In addition, many of the older buildings are being forced to perform renovations and structural upgrades to assure prospective tenants that their properties meet the 1981 codes. According to Miki Shoji, competition to attract tenants intensified among the large-scale previously existing buildings in the fourth quarter of 2004.

There are 4 levels of seismic resistance standards applied to building construction in Japan, explains a spokesperson for Tokyu Land Co., Ltd. Buildings critical to Japan's survival such as new hospitals or the Tokyo Metropolitan Government Building must meet the standards of the top level, level 4. Level 3 is reached by many of the class-A rental office buildings, such as the Shibuya Minami Tokyu Project. Level 2 is equivalent to the current seismic construction codes and anything at level 1 is not compliant.

While many analysts agree that much of Tokyo—with its mess of flimsy buildings and houses vulnerable to earthquakes—needs rebuilding, they say the government has no real idea of what it wants to achieve. "The government does not have a vision for urban planning," says Tokunosuke Hasegawa, professor of real estate studies at Meikai University near Tokyo. Right now, its policy is nothing more than making lots of skyscrapers."

According to Miki Shoji, the occupancy rates for large-scale newly completed buildings remained high in the fourth quarter of 2004 and consolidation of office space on to larger single floors was seen. For this reason, large-scale office buildings offering attractive lease terms and conditions received strong interest from prospective tenants.

"The government's deregulation has in part made huge building projects possible," says Takashi Ishizawa, senior analyst at Mizuho Securities. Among other things, it has eased rules on regulations covering the size and height of buildings in each area and has allowed the introduction of what are known in the U.S. as transferable development rights.

According to John Erskine Banta, General Manager and Director of Radisson Miyako Hotel Tokyo, Japan's construction technology has included advanced earthquake-resistant designs for more than 1,200 years. Such technology was first used in the construction of huge Buddhist temples and high-rise pagodas built entirely of wood, from three to five stories, topped by a spire that made them look even higher.

The five-storied pagoda on the grounds of the Horyuji Temple in Nara, believed to be the oldest wooden building in the world, built in the sixth century, is designed to absorb shocks, with the central pillar swinging like a long pendulum, explains Banta. The nearby Todaiji Temple, constructed between 724 and 749, is recognized as the largest wooden building in the world. Both the Horyuji and Todaiji temples have suffered some earthquake damage since they were built, but neither has ever collapsed.

According to a Takenaka Corporation spokesperson, the temple construction consists of wooden beam joints encircling huge pillars, which allow the different parts of the building to shift slowly during an earthquake, absorbing the seismic vibrations. The joints of the large pillars supporting the tile roof of the huge temple absorb the shock of earthquakes and allow the pillars to tilt, but once the shaking is over the pillars return to their upright position.

Therefore, we can only imagine the dynamics of the marketplace after a powerful earthquake strikes Tokyo and the only structures still standing are the new large-scale high-tech structures (oh, and the wooden temples and pagodas). One major issue is that office workers, who mainly live outside of the city center, will not be able to commute to work with the trains not operating and roads blocked. Even if commuters could reach their downtown offices, the buildings would hardly be functional in case the power grid goes down. In the event of a power outage, the buildings would be able to operate only for a day at longest because they only have oil tanks and generators to provide back-up power for the building's basic infrastructure for a day at most. Many don't even have such back-up facilities.

Many of the financial institutions have built back-up offices that are within one day's walking distance of the main office. These usually sit empty and have a basic infrastructure and a set of servers with a back-up copy of all critical data and supplies so that a skeleton staff can continue operations until Tokyo recovers.

With class-A buildings accounting for a mere 6 percent of the office stock in the Tokyo CBD and a municipal government without the vision for urban renewal, we can only hope workers never have to make that one-day trek to back-up offices.

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