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I will explain our internal growth from page 5.
Let me start with office properties. Please refer to the upper left bar chart.
During the period ended November 2018, rent increased in 3,262 tsubo, 61% of the area subject to lease renewal, with an average increase rate of 5.2%. This uptrend continues in the periods ending May 2019 and November 2019 and we expect further increase of internal growth.
Rent increase in Tokyo Office properties has been continued since the period ended November 2013 and some tenants have accepted the 2nd and 3rd revisions.
As shown in the pie chart on upper right, among the tenants whose rents were already increased, 25% have agreed to the 2nd and 3rd upward revision with an average increase rate of 8.5%, a relatively higher rent.
The below graph shows the average rents of overall Tokyo Office properties with rent gap, and that of Tokyo Office properties located in Greater Shibuya area with rent gap.
The average rent of our existing portfolio has continued to increase globally owing to steadily achieved upward rent revisions. While, similar upward trend has been seen in the market rent backed by market’s robust demand for office, the rent gap has been widening. At the end of November 2018, the rent gap of Tokyo Office properties stands at negative 9% and negative 19% for Tokyo Office properties located in Greater Shibuya.
Going forward, we will face increasing number of tenants subject to rent revisions of multiple times, however we aim to achieve further internal growth by taking advantage of favorable market condition.
Please turn to the next page.
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