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Kyodo News: Central Tokyo population expected to keep growing

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Creative Commons: erikjohansson

KYODO: The population of three central Tokyo wards is projected to continue growing after 2025, when the overall number of citizens in the capital is estimated to take a downward turn, thanks to an apartment construction boom and convenient transport access. Chiyoda, Chuo and Minato wards have seen an influx of families with children and elderly people and the population growth there is expected to continue through 2040, but it could present municipal governments with challenges in providing adequate child and nursing care.

According to a Tokyo metropolitan government estimate, the population of the capital is expected to fall after hitting its peak of 13.98 million in 2025. But the three central wards are expected to rise further and reach a total of around 635,000 in 2040, up some 40 percent from January 2017. The three wards faced population drain to suburbs due to soaring land prices in the period of steep Japanese economic growth around the 1960s and 1970s and in the peak years of the bubble economy in the late 1980s.

However, the number of residents picked up in the late 1990s with Minato Ward’s population exceeding 250,000 in February for the first time in 54 years. Emiko Kanno, a 42-year-old office worker, lives in a Minato Ward apartment close to Tokyo Tower. “With the developed transportation system, the area is convenient for living and my husband’s commuting,” she said. A native of Hyogo in western Japan, Kanno used to live in Kanagawa Prefecture, southwest of Tokyo, but she moved to the area four years ago when she got married.

The international character of the area boasting many foreign embassies has been a draw and Kanno seems satisfied with the environment for raising her 1-year-old son. High-rise apartment buildings in the waterfront areas proved popular among families with small children and the total fertility rate, which shows the average number of children a woman will bear in her lifetime, stood at 1.44 in Minato in 2015, the highest among Tokyo’s 23 wards.

Chiyoda Ward, home of the national parliament and many government buildings, also saw its population surpass 60,000 for the first time since 1981. The population in Chuo Ward, where the Ginza shopping district and Tsukiji fish market are located, once fell below 80,000 but has recovered to 150,000.

A Tokyo metropolitan government official said, “We have seen a trend of people moving to city centers after the burst of the bubble economy. The three wards with many office buildings have also gone through redevelopment.”The official suggested the latest trend reflects more people opting to live close to their offices after the March 2011 earthquake and tsunami disrupted transportation systems and forced many to walk back home.

But the growing urban wards are not free from problems. The number of children who failed to secure slots in preschools in Minato Ward rose 2.5 times in April from a year earlier. A Minato Ward official said the municipal government is “overwhelmed with delight but a lack of enough childcare services has been the biggest challenge.”

Some elderly families have also been moving from detached houses in the suburbs to apartments in city centers as they are more convenient and well managed, the Tokyo metropolitan government official said. But with more senior citizens living alone or the elderly taking care of their even older parents, more social workers would be required to look after them. “It would be difficult for social workers to come to homes of the elderly in high-rise apartments that are automatically locked at their entrances. There would also be a need to assist people in such cases as elevators stop in disasters,” the official said.

While Tokyo continues to draw population, neighboring prefectures have seen serious population outflows of young people. Even in prefectural capitals of Maebashi in Gunma and Kofu in Yamanashi, populations have been declining. In the city of Shizuoka in central Japan, an estimated population as of April 1 fell below 700,000.

© KYODO

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Results of MLIT’s latest land price survey

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According to the Ministry of Land, Infrastructure, Transport and Tourism’s annual residential land survey (地価公示), titled 平成29年地価公示 (2017 Land price public announcement) residential land in Tokyo’s most central 23 wards increased by 3% in 2016, and in greater Tokyo area that averaged 0.7% increase. Chiyoda, Chuo and Minato wards all have prices increase by more than 5% in 2016 (see graphic above), while most of the 23 wards experienced growths of between 2 and 5 percent growth YoY. There is great disparity between what is happening in Tokyo (particularly within the 23 wards) and nationwide.

As we have written in the past, growth in condominium prices in central Tokyo have increased substantially over the last few years. However, given the high prices, the total number of transactions decreased last year. As the number of new condo sales has started to decrease, there is also less pressure among property developers to acquire and develop sites, which in turn keep land prices at bay. In terms of commercial real estate, the total for 23-Ward Tokyo increased by 5.5% (4.8% in 2015) and increased by 1.9% (1.8% in 2015) for the greater Tokyo area in 2016.

Visit the main site to download the statistics (in Japanese): http://tochi.mlit.go.jp/chika/kouji/2017/index.html, and here is the summary for Tokyo residential land: http://tochi.mlit.go.jp/chika/kouji/2017/46-1.html

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Results are in for the Recruit Sumai Survey

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The latest Recruit Sumai survey on favorite neighborhoods to live in the Kanto region has been published. The top five neighborhoods in the ranking are: Kichijoji, Ebisu, Yokohama, Meguro and Shinagawa. Last year, the top winner of this questionnaire was Ebisu, which toppled Kichijoji, a long-standing top contender from previous years. Other places in the top ten include Nakameguro, Shibuya and Tokyo station area. The popularity of the JR Yamanote train line is noticeable within the results.

The ranking, which takes place annually, is based on a survey conducted over the Internet for several days in January, and respondents pick their top three choices of where they would most like to live according to train stations. For the 2017 survey, a total of 3,996 people living in Tokyo, Kanagawa, Chiba and Ibaraki prefectures between the ages of 20-49 submitted their responses.

It seems Kichijoji is mainly blessed by attributes such as shopping streets, department stores and Inokashira Park. For results of the survey, follow this link for the pdf file (in Japanese): http://www.recruit-sumai.co.jp/press/upload/sumitaimachi_2017_kanto.pdf. Visit Higherground (http://higherground-rent.com/) for apartment listings in Ebisu, Meguro, Nakameguro, Shibuya, and Shinagawa.

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Reuters News: Tokyo office boom fades with more space, fewer workers

REUTERS/Yuya Shino/File Photo

By Junko Fujita | TOKYO (Mon, Jan 16th, 2017)

Commercial property prices in Tokyo, a bellwether for Japan’s market, look to have peaked as the capital faces a glut of new offices even as the number of office workers is set to decline.

The property market had rebounded in the past three years as Prime Minister Shinzo Abe’s economic policies, with ultra-low interest rates, drew in investors attracted by the wider gap than in other developed markets between returns on property and borrowing costs.

Also, as Japanese companies regained confidence, they sought more space, helping drive down office vacancy rates in the capital. Rents have been rising since 2014.

But office rents are now expected to start falling as early as next year as new space comes on to the market, analysts and commercial property owners say.

“Tokyo’s office space is almost full, but if the economy turns negative, some tenants may reduce their space or move to a cheaper location,” said Masashi Saio, section manager at the real estate department of Nippon Life Insurance, which owns office buildings nationwide.

“If that happens, owners of office properties may have to cut rents. We expect a large supply of office space that could affect the balance between supply and demand,” he added.

Between 2018 and 2020, when Tokyo is due to host the Olympic Games, the capital expects to add 2 million square meters of new office space - equal to more than 8 percent of its total as ofmid-2016, said Shunji Kobayashi, senior manager at the real estate research team for Sumitomo Mitsui Trust Bank.

“Newer space may be filled, but there will be vacancies in older properties,” he said. “Demand for new office space is not expanding because financial institutions are not growing their space like they used to.”

Worries over falling rents are already feeding into property firms’ share prices, with the performance of the Topix real estate index .IRLTY.T ranking 26th out of 33 sub-indexes last year.

Mitsui Fudosan (8801.T), one of Japan’s largest property developers, is already marketing space in its Tokyo Midtown, a10-year-old office and retail complex in Roppongi, which is expected to become almost one-third vacant, a Tokyo-based broker said.

Yahoo Japan Corp (4689.T) last year moved from the complex to the newly built Tokyo Garden Terrace, developed by Seibu Holdings Inc (9024.T). And Fast Retailing Co (9983.T), which operates the Uniqlo clothing retailer, also plans to move some of its operations out of the complex to a warehouse in a cheaper location.

MORE OFFICES TO LET

Tokyo’s office vacancy rate has fallen in almost every month since June 2012, from 9.43 percent to 3.61 percent, said Miki Shoji, a broker, and office rents rose 10.6 percent over that period, though that increase was tempered by the prospect of so much new office space coming onstream.

The vacancy rate is expected to rise again, to around 6percent - more than the 5 percent level considered healthy - and that will push down rents from 2019, said Kobayashi at SumitomoMitsui Trust.

CBRE, a global real estate research firm, predicts Tokyo’s prime office rents will fall 1 percent in 2017-18, and some new office towers will open with vacancies.

With an average annual office rent of $160 per square foot, Tokyo’s Marunouchi financial district ranks sixth among global business centers, some way behind Hong Kong’s Central ($290) and London’s West End ($262), according to CBRE.

Predictions of falling rents have already slowed property deals, with the value of office property transactions falling 28 percent to 1.3 trillion yen ($11.37 billion) last year. Urban Research Institute, a think-tank affiliated with Mizuho Trust & Banking Co, reckons this is because prices have risen too high for investors to justify future income.

Office deals made up less than a third of all transactions last year, down from 41 percent in 2015, according to Urban Research.

Meanwhile, firms are still on the move.

Trading firm Mitsui & Co (8031.T) is due to move into a new headquarters building in mid-2020, leaving Nippon Life, the owner of its current offices in the upmarket 22-floor Marunouchi Garden Tower, to find new tenants.

As co-owner of its new headquarters, Mitsui & Co will also have to find tenants for part of the twin-tower office and retail complex that will add 360,000 square meters of new space.

The other owner, Mitsui Fudosan, is also developing a35-storey building in Hibiya, near the Imperial Palace, to be completed by next January, as well as a 31-storey tower due in the same year in Nihonbashi.

Nippon Life must also secure tenants for a 28-storey office tower due to be completed in August 2018 in Hamamatsucho.

While the office space mounts up, the Tokyo government expects the capital’s workforce will have declined by nearly a tenth in the 25 years to 2035 as Japan’s population shrinks.

($1 = 114.3600 yen)

(Reporting by Junko Fujita; Editing by Ian Geoghegan)

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New in Town: The Ginza Place Opens

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Located right on Ginza 4-chome crossing, the Ginza Place has opened in Ginza, Tokyo. The development replaces the former Nissan Gallery building, and features a number of shops and eateries. It also has the new Nissan Gallery, as well as a flagship Sony showroom. There are five restaurants and cafes in the property.

The 11-storey building is constructed with 5315 aluminium panels to give it a stunning, modern look. There are balconies on the 3rd and 7th floor of the building, which overlooks the Chuo and Harumi Avenues. The development was designed by Klein Dytham Architects and constructed by Taisei Corporation.

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Shibuya Station area undergoing once in a century makeover

Photo/Illutration

The Shibuyagawa river flows behind the wall to the left in the area above the ceiling of a new east exit underground plaza under construction at Tokyo’s Shibuya Station. (Kenji Tsuji)

We share a recent article from the Asahi Shimbun about the current massive development in Shibuya. Written by Kenji Tsuji, Asahi Shimbun Staff Writer, the article describes the scale of the construction of the underground plaza.

An excerpt: The area around Shibuya Station, one of the busiest rail hubs in Japan, is undergoing a major makeover on a scale that occurs only once in 100 years, according to the railway operator. The new east exit underground plaza will measure about 1,600 square meters. It will be located beneath the Shibuyagawa river, which flows one level underground. The course of the river was redirected last summer as part of the project. Below the plaza and 25 meters below ground level, a huge water tank is also being installed. The tank measures 22 meters by 45 meters and is 7 meters deep, a capacity that can hold up to 4,000 tons of rainwater, equivalent to the volume of eight 25-meter-long swimming pools. Because Shibuya Station is surrounded by hills, the water tank is designed to help prevent flooding of the station and neighboring areas during rainstorms. Click here for complete article: Shibuya Station area undergoing once in a century makeover

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Average rents in 23-Ward Tokyo increased marginally YoY

According to the latest Kantei rental data, the average monthly rent was JPY3,307 per sq. meters in 23-Ward Tokyo, representing a month-on-month (MoM) drop of 1.4%, However it also represents an increase of  2.1% year-on-year (YoY). Kantei recorded an average apartment size of 55.94 sq. meters and average building age of 16.7 years.

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The Recent Unveiling of Atre’s West Building in Ebisu

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Oh My, from the recent launch of snazzy new Tokyu Plaza in Ginza and Lumine’s NEWoMan Complex in the new south exit of Shinjuku station (right by the Takashimaya Times Square) to the recent unveiling of a new shopping annex in Ebisu, Tokyo is brimming with new commercial outlets.

ebisuatrewesthallThe latest unveiling of Atre’s West Building in Ebisu station adds a plethora of modern shops, chic eateries and lounge space to the area. This new building is connected by a pedestrian bridge with the original Atre main building, and features nine floors of retail space, including the basement with a The Garden supermarket. The top floor features a pleasant outdoor public seating space set in a charming garden scene.

With a total floor space of 9,700 sq. meters, the building showcases over two dozen commercial outlets.

A popular addition to Ebisu via this new complex is the Shake Shack hamburger eatery, which has drawn long lines waiting to taste its New York-style burgers, hot dogs, crinkle-cut fries and desserts.ebisuatrewesthall2

Much like the original Atre in Ebisu, the lineup will draw mainly women consumers with its healthy, salad-type eateries and crepe cafe, and fashion and beauty shops such as Cosme Kitchen. The Muji which used to be in the main building has expanded to occupy two floors and now includes a kids clothing section. ebisuatrewesthall4

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Mori’s Toranomon Future

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In a recent official press release, Mori Building unveils three redevelopment projects leading up to 2020 and beyond.

Tokyo, April 13, 2016 - Mori Building, a leading urban landscape developer, today announced an extensive slate of large-scale redevelopment projects involving the construction of three towers around the existing Toranomon Hills . The plans will transform the area into a more vibrant, globally accessible business hub that will entice individuals and enterprises from around the world to live, work and play in Toranomon.

Over the coming years, Mori Building will develop three new mixed-use towers tentatively called Toranomon Hills Business Tower, Toranomon Hills Residential Tower and Toranomon Hills Station Tower around the existing Toranomon Hills, which was opened in June 2014.

residentialtower1Upon completion, the total area of the Toranomon Hills complex will reach about 7.5 ha, including the four Toranomon Hills towers, new transport stations, roads and green space. There will be about 800,000m2 of total floor space, approximately equivalent to that of Roppongi Hills, including about 300,000m2 of office space and 26,000m2 of retail space. The site will also house a new subway station on the Hibiya Line and a new Bus Rapid Transit (BRT) station that will connect central Tokyo and the bay area.

Mori’s redevelopment projects in Toranomon have already brought tangible results to the area, an impact which is expected to accelerate with these new projects. Since the inauguration of existing Toranomon Hills, land prices have jumped by about 34.4 percent and the number of people using Toranomon Station has increased by 7 percent. At Toranomon Hills complex alone, the large-scale office space to be created in this development is expected to triple the number of people working in the complex to 30,000. Meanwhile, projects by Mori and other developers in the larger Toranomon area are forecast to add more new office space over the next 10 years than was added over the last 30 years.

The number of residents in the area is also expected to increase as Toranomon Residential Tower adds about 600 residential units. The project also includes the cultivation of extensive green spaces, more than doubling the current area of 6,000m2 to 15,000m2. This will form a network of greenery that connects Toranomon Hills to the adjacent Mt. Atago slope and the Atago Green Hills complex, creating a refreshing and an eco-friendly nature island.stationtower11

“The city and its people need to constantly evolve in order to bolster the city’s power to attract creative individuals and enterprises from around the world”, said Shingo Tsuji, CEO of Mori Building. “We believe that Toranomon Hills complex will continue to catalyze economic, cultural and environmental changes, establishing the area as a hub for international business that will enliven and strengthen Tokyo as a whole.”

Mori envisions this project as multiple structures forming a conceptually harmonious complex that is smoothly integrated with all transportation options, reshaping Toranomon into a gateway to Tokyo and hub for international business.

“We believe that people have the power to change the city. Based on our unique urban design concept of Vertical Garden Cities, which makes intelligent use of ultra-high-rise structures and underground space to enhance infrastructure efficiency and integrate diverse urban functions, we seek to reshape Toranomon Hills into not only a place for business but also as a community that connects and nurtures diverse people gathered here,” said Shingo Tsuji.

Toranomon Hills Business Tower will generate some 94,000m2 of office space by 2019. The 36-floor tower will house the Innovation Center, offering office space, salons and seminar venues for venture capitalists and top companies’ new business development divisions. To bring world-class sophistication to the design, Mori has tapped German architect Christoph Ingenhoven to direct the tower’s external design and leading Japanese interior designer Masamichi Katayama to undertake the interior design of retail facilities.

residentialtower11The tower will house the new BRT station connecting central Tokyo, the bay area and various venues for Tokyo 2020 Olympic and Paralympic Games, as well as a new Airport Limousine bus terminal that will connect Toranomon to Tokyo’s international airports. BRT will be able to carry some 3,000 people per hour and is expected to serve as an important mode of transportation during the Games, carrying international athletes and audiences alike.

Toranomon Hills Residential Tower will supply 600 premium residential units by 2019, bringing the total number in the Toranomon Hills complex to about 800. Responding to the needs of long-term foreign visitors, the 56-floor tower will offer large-scale residential units and serviced apartments with Western-style en-suite bathrooms, a spa and fitness center, childcare facilities and a 24-hour bilingual concierge on site. The interior will be designed by Tony Chi, the NY-based designer responsible for the Grand Hyatt Tokyo and Andaz Tokyo. Christoph Ingenhoven will design the exterior of this tower as well to ensure a harmonious balance with the adjacent Toranomon Hills Business Tower and the existing Toranomon Hills.

Toranomon Hills Station Tower will be a unique redevelopment collaboration combining a multi-use high-rise constructed by Mori with a new subway station created by Urban Renaissance Agency. The tower will incorporate the new Hibiya Line subway station scheduled to begin partial service in 2020 and an elevated open deck with greenery connecting the tower to the rest of the complex via existing Toranomon Hills. Mori Building’s signature style of integrated development will provide a soothing greenery-filled environment that also facilitates the movement of visitors, workers, and residents around the complex and through the city. The project will be designed by OMA principal Shohei Shigematsu in collaboration with founding principal Rem Koolhaas. The specs for Toranomon Hills Station Tower are still being finalized, but it is scheduled to open in 2022.

For ground transport, Toranomon Hills will continue to provide smooth access to Loop Road No. 2, a key trunk route that will stretch from Shimbashi to Toyosu when the final section is completed towards 2020, connecting the facility directly to Tokyo’s fast-developing bay area.

Moving forward, Mori Building will undertake a total of ten large-scale redevelopment projects in Toranomon and surrounding areas, with these three towers at the nexus. For more details: http://www.mori.co.jp/en/img/article/160413_1.pdf Press Release and Photos sourced from Mori Building

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Tokyo 23-ward average rental cost continue to climb

Just a quick update on Tokyo’s rental market. Recently, Tokyo Kantei has released its data for rents for 2015. In 2015, the average monthly rent for an apartment in Tokyo’s 23 wards reached JPY 3,265 yen/square meter, which represents a year-on-year (YoY) increase of 2.5%. According to the Kantei press release, this is also the third consecutive year that rents have grown in “downtown” Tokyo.

The rise in rents can mainly be attributed to the real estate construction boom that has been happening in Tokyo — while one would think the gluttony of addition supply would dampen prices — contrary to this — newly-built, snazzy residences command a price premium when released into the market, thus costing a lot more to rent — which in turn, pushes up rental averages. According to Tokyo Kantei, in 2012, newly constructed apartments made up a mere 3% of the Tokyo 23-ward rental market, and this number has risen to almost 8% in 2015.

For the press release (in Japanese): http://www.kantei.ne.jp/release/PDFs/T2015.pdf

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