Tokyo's office vacancy rate rose to a four-year high in May as companies in the capital slashed spending and jobs.

The rate increased for a 16th month to 6.96%, the highest since September 2004 and up from 6.79% in April, real estate brokerage Miki Shoji Co. said in a report released Thursday in Tokyo.

Vacancies may reach as high as 10% in Tokyo's main business districts in the next few years as the fallout of the economic slowdown continues, said Kimi Miyashita, an economic researcher at BNP Paribas in Tokyo. The economy shrank at a record 14.2% pace last quarter, revised figures from the Cabinet Office showed Thursday.

Japan Times