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I will explain Action two, our internal growth progress in office.
Overall market condition is still tight and trends in upward rent revision have been strong, so no change has been marked in our condition to work to fill in the gap.
In rent revision in Tokyo office, during the period ended November 2019, we increased rent in 6,342 tsubo, or 62% of the area subjected to lease renewal, with an average increase rate of 12.0%, which accounts for ¥99.5 million per period, the largest amount ever.
For the period ending May 2020, we increased rent in 1,427 tsubo, which has been already reflected in our financial forecasts.
As a result, an overall rent gap against market rent in Tokyo office turns to be 11% in average, widened by one point from the previous period.
Please refer to the diversification of rent gap in right.
For the period ending May 2020, the gap is wide at 24%, and together with the period ending November 2020, this year is an important period for rent increase negotiation, thus we continue negotiation for rent increase actively to realize further internal growth.
The bottom shows a condition in tenant replacement.
Even though opportunities are limited, we achieved rent increase by ¥19.4 million per period, up 29.1% in average rent for the period ended November 2019.
In our past explanation, tenant replacement provided an opportunity to fill in the gap at one time but we see some cases to agree with higher rent which exceeds market rent. Currently we achieved a rent increase at approximately 110% of market rent.
Under such condition, we have been trying to conduct fixed-term contracts to secure future potential, and for agreements with favorable terms, we try to have contracts with longer period to secure higher profit for longer term.
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