Category Archives: BUSINESS

Nationwide supply of new apartments drops to 44-year low

The supply of brand new apartments released for sale across Japan in 2020 hit the lowest level since 1976. According to the Real Estate Economic Institute, a total of 59,907 apartments were released for sale, down 15.2% from 2019.

In 1976 the supply was 49,955 units. A record high of 188,343 units was seen in 1994.

Greater Tokyo saw supply drop 12.8% to 27,228 units, while the Kinki region saw supply drop 15.8% to 15,195 units. In Tokyo’s 23 wards, supply dropped 20.6% from 2019 to 10,911 units.

The average price of a brand new apartment nationwide was 49,710,000 Yen, up 3.8% from 2019. The average price per square meter was 758,000 Yen, up 4.4% from 2019. This is the 8th year in a row to see a year-on-year increase in the price per square meter, and the 4th year in a row to reach a new record high.

The average price across greater Tokyo increased by 1.7% from 2019 to 60,830,000 Yen. This is only the second time that the average price has exceeded 60 million Yen. The first was in 1990 when the average reached 61,230,000 Yen. The average price per square meter had increased by 5.2% from 2019 to 925,000 Yen. The Institute is expecting prices to remain high due to high construction costs and strong competition for development sites in popular areas.

Supply in 2021 is forecast to reach 69,000 units, up 15.2% from 2020.

Source: The Real Estate Economic Institute, February 24, 2021.

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Tokyo records net outflow of foreign residents in 2020

According to the Tokyo Metropolitan Government Statistics Division’s report on population movements in the capital in 2020, the metropolitan area saw the total population grow by 8,600 residents (both Japanese and foreigners) over the year. This is the 25th year in a row to see a year-on-year increase. The total population in the metropolitan area reached 13,960,236 residents as of January 1, 2021, while the population of the 23 wards increased by 2,154 to 9,655,266 residents.

While this may not look like a large increase in the 23 wards, the Japanese population actually increased by 31,248 in 2020. At the same time, the number of foreign residents shrank by 29,094.

A total of 306,422 Japanese residents moved into Tokyo from other prefectures and 279,445 moved out, resulting in a net inflow of 26,977 in 2020. 22 of the 23 wards saw a net inflow of residents, with Edogawa ward seeing a net outflow of 1,221 Japanese residents.

For the foreign resident population, 25,675 moved into Tokyo’s 23 wards from other prefectures while 33,886 moved out, resulting in a net outflow of 8,211 residents. The only wards to see a net inflow were Chiyoda (+2), Shinagawa (+96), and Shibuya (+19).

The 23 wards saw 332,097 residents, both Japanese and foreign, move in from other prefectures, and 313,331 residents move out, resulting in a net inflow of 18,766.

Source: The Tokyo Metropolitan Government, January 28, 2021.

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Transparency problems confront public scrutiny of Japan’s COVID-19 aid

Aid equipment, including tents and generators, are prepared in a warehouse in Singapore before they are delivered to Myanmar May 6, 2008. Countries worldwide promised help to Myanmar after Cyclone Nargis killed 10,000 people in just one town, suggesting the overall death toll in the impoverished military-run Southeast Asian nation will be much higher. The aid was organised by the Japan International Cooperation Agency (Photo: Reuters/Vivek Prakash).

Author: Yusaku Yoshikawa, JIN Corporation

In response to COVID-19, Japan launched an Official Development Assistance (ODA) scheme for developing countries. Announced in December 2020, the scheme commits up to 500 billion yen (US$4.5 billion) over two years to a COVID-19 Crisis Response Emergency Support Loan arrangement that aims to support developing economies. The Ministry of Foreign Affairs of Japan (MOFA) claims that Japan started providing loans ‘in the first few months immediately after the outbreak’ to countries such as Niger, India and Myanmar.

But to what extent will this assistance actually help recipient countries cope with the pandemic? And will this aid be free from Japan’s persistent challenge of a lack of transparency when it comes to ODA?

The emergency scheme comprises multilateral and bilateral assistance, with multilateral assistance going to recipient countries via international institutions such as UNICEF and the UN Development Programme, and seeks mainly to train healthcare workers and disseminate COVID-19 information. In addition to the emergency loan program, there is bilateral assistance consisting of medical equipment provisions worth 48 billion yen (US$436 million) and technical assistance worth 1.5 billion yen (US$13 million). The additional aid almost compares with Japan’s annual ODA budget of 561 billion yen (US$5.4 billion) in fiscal year 2020.

In its 2015 Cabinet Decision on the Development Cooperation Charter, the Japanese government positions ODA as its responsibility, both for the international community and for its own citizenry. It states that Japan’s ODA aims to ‘secure its national interests‘ and — while a matter for debate — the Japanese public seems to expect this assistance will contribute …continue reading

    

Quick real estate news summary for the week

Sapporo’s oldest capsule hotel closes, apartment rents hit a record high, and Keio Plaza Hotel to offer monthly stays. Below is a quick weekly summary of some of the recent goings-on in the Japanese real estate market.

Sapporo’s oldest capsule hotel closes

Capsule Inn Sapporo closed its doors on January 24, ending 40 years of operations. It is said to be the oldest capsule hotel in Sapporo. In recent years it was running at a loss, made even worse by the pandemic. Sapporo’s entertainment district of Susukino continues to struggle with a sharp drop in tourists and shortened restaurant operating hours. On January 31, nearby Spa Hotel SOLE Susukino permanently closed. The capsule hotel opened in an existing office building in August 2013. BIZCOURT Cabin Susukino has been temporarily closed since March 2020.

Apartment rents in Tokyo hit record high in January

According to Tokyo Kantei, the average monthly advertised rent of a condominium-type apartment in the Tokyo metropolitan area was 3,723 Yen/sqm in January. This is the highest on record. In Tokyo’s 23 wards, the average rent was 3,853 Yen/sqm, up 0.8% from the previous month and up 3.2% from last year. In Osaka City, rents remained relatively flat at 2,464 Yen/sqm.

Keio Plaza Hotel offering monthly stays

Keio Plaza Hotel in Shinjuku is following in the Imperial Hotel’s footsteps by offering hotel rooms on a monthly rental basis. A standard room (23.5 sqm) can be rented for 210,000 Yen (US$1,980), including tax, for a 30 night stay. A 33.7 sqm superior room goes for 240,000 Yen, while a 35.5 sqm deluxe room goes for 270,000 Yen. Up to two people can stay in the room. The packages include breakfast each day in the hotel restaurant, car parking, conference room use and newspaper delivery. Up to 16 rooms will be made available under this plan. …continue reading

    

Highest-ever Tokyo homes announced, will be as far from the street as tip of Tokyo Tower

Amazing views for a sky-high price.

More people live in Tokyo than in any other city in Japan. Well, technically, a lot of them live above Tokyo, since as you get closer to downtown, street-level building space is almost entirely taken up by businesses, with apartments and condominiums on higher floors.

So as the city grows, it grows upwards, and it’s just been announced that a new building in Tokyo’s Minato Ward will have the highest-altitude homes in all of Japan.

Property developer Mori Building is carrying out construction on a currently unnamed building in the Toranomon/Azabudai neighborhood that will stand 64 floors tall when it’s finished. Mori has announced that the top 11 floors will be used for condominium housing, with heights between 260 and 330 meters (853 to 1,083 feet) above the street.

For reference, Tokyo Tower’s Main Deck observation floor is a measly 150 meters high, and its Top Deck is still just 250 meters. Even the absolute tip of the tower’s spire, at 333 meters, is just barely taller than the top floor of the new condominium block, meaning the new homes will have some amazing views of the city as well as landmarks such as Mt. Fuji on clear days.

Coincidentally, in Japanese the word for “high,” takai, is also the word for “expensive,” and both meanings will be unquestionably applicable to the 91-unit condo project, which is to be called Aman Residence Tokyo. While exact pricing hasn’t been announced, analysts expect units to go for several billion yen (tens of millions US$).

Sources: PR Times, Goo/Kyodo via Otakomu
Top image: PR Times
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Private teleworking booths–how much work can you get done in one? We test it out

Sure, they’re convenient, but can you actually get work done in them?

Working from home has become something of the new normal due to a certain pandemic, but not everyone has the ideal space at home to turn into a makeshift working environment. Teleworking spaces have started popping up in places like capsule hotels and karaoke bars, with even theme parks getting in on the remote work action. But while working from the highest point in a ferris wheel may seem like fun at first, it might not be the ideal place to have a Zoom meeting with your boss.

For people who want a more conventional space to get some work done, the Fuji Xerox CocoDesk booths might be the ideal option. When they first opened back in August 2020, there were only a few booths, but according to the Fuji Xerox website there are currently 63 CocoDesks in action. Found in underground Tokyo Metro stations, these private boxes are available for rent in blocks of 15 minutes for 250 yen (US$2.36). The CocoDesk has everything you need–sockets for your electronics, WiFi, air conditioning, a monitor with a liquid crystal display, and of course, a desk.

▼ There’s even a USB-friendly socket, too.

The booth is big enough for one person to use at a time, and according to our Japanese reporter P.K Sanjun, it felt roomy enough when sitting at the desk. However, he felt a little cramped when he stood up inside the booth, so surely P.K’s usual work-related activities would be a little tough to accomplish in such a confined space.

▼ Definitely not enough space for two people, even if one of them is pretty …continue reading

    

Japanese defence spending at the fiscal crossroads

Royal Australian Navy, Republic of Korea Navy, Japan Maritime Self-Defense Force and United States Navy warships sail in formation during the Pacific Vanguard 2020 exercise, 11 September 2020 (Photo: Reuters/ABACAPRESS).

Author: Yuki Tatsumi, Stimson Center

Japan’s 2021 defence budget is set to be its largest ever, continuing a near decade-long trend set in motion by former prime minister Shinzo Abe. Under Abe’s watch, Japan has increased its defence budget every year since 2005. The uptick in spending has continued since Abe left office in September 2020 — last December, the Ministry of Defense released its revised budget request for the 2021 fiscal year totalling approximately 5.3 trillion yen (US$50.2 billion).

This upward trend has at times been sensationalised as a return to militarism, with critics pointing to new capabilities introduced during Abe’s tenure. Recent examples include the indigenous development of long-range surface-to-air missiles and other ‘standoff capabilities’ to replace the cancelled Aegis Ashore missile defence program. The Aegis system will be replaced with destroyers and long-range cruise missiles based on the surface-to-air missiles already in use by the Japan Ground Self-Defense Force.

The reality is that Japan’s defence budget now and under prime minister Abe has remained below one per cent of GDP. If one excludes expenses related to relocating US forces in Okinawa, replacing and maintaining the Japanese equivalent to Air Force One, and making the Japan Self-Defense Forces (SDF) and Ministry of Defense more resilient to natural disasters, Japan’s defence budget did not recover to the 2006 level until 2018.

Increases in nominal defence spending since 2013 have been necessary to pay for several big-ticket items, such as enhancing the SDF’s amphibious capabilities and creating more robust space and cyberspace defence systems. Spending increases were also necessary to phase out F-2 fighter jets with next-generation F-X aircraft, and most recently to replace Aegis Ashore. This hardly meets the sensational characterisations of Japanese defence spending. Rather, these moves reflect decisions to …continue reading

    

Office high-rise now planned for former TSK Building site in Roppongi

There are signs of life on the site of a now-demolished scandal-ridden building in Roppongi.

A new construction notice went up in January outlining plans for a 146-meter tall, 22-story office tower with a total floor area of 32,500 sqm. Construction is scheduled to start in May 2021 with completion by September 2024.

The 4,200 sqm site sits in a prominent position directly between Roppongi Hills and Tokyo Midtown, with Roppongi Avenue street frontage.

In the 1970s it was home to a powerful criminal organization’s headquarters, housing both their offices as well as apartments, a boxing gym, beauty salons, bars and a famous nightclub that attracted the who’s who of the time. Over the years, the ownership of the land and building became messy and complicated. After the building was demolished, the land was sold to a developer in 2011.

In early 2013, the developer announced plans for a 115-meter tall, 34-story apartment building with completion scheduled for 2015. Those plans were shelved with the site sitting idle as a car park for for the next eight years.

Location

7-15 Roppongi, Minato-ku, Tokyo

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Apartment transactions in January reach all-time high

The second state of emergency issued on January 7 wasn’t enough to slow buying activity this time around, with REINS reporting that 3,480 second-hand apartments were sold across greater Tokyo in January, up 37.3% from the previous month and up 29.9% from January 2020. This is the highest number of transactions seen for the month of January since REINS began reporting data in May 1990.

The average sale price was 37,720,000 Yen, up 0.9% from the previous month and up 2.7% from last year. This is the 8th month in a row to record a year-on-year increase.

The average price per square meter was 575,700 Yen, up 0.1% from the previous month and up 2.3% from last year. This is the 9th month in a row to see a year-on-year increase. The average apartment size was 65.52 sqm, 0.28 sqm larger than last year, and the average building age was 22.05 years.

In the Tokyo metropolitan area 1,775 apartments were reported to have sold, up 38.7% from the previous month and up 26.2% from last year. The average sale price was 47,400,000 Yen, down 0.5% from the previous month but up 2.5% from last year. The average price per square meter was 771,000 Yen, down 0.1% from the previous month but up 3.1% from last year. The average apartment size was 61.47 sqm, 0.32 sqm smaller than last year, and the average building age was 21.05 years.

New listings continued to decline, with a year-on-year drop of 22.3% across greater Tokyo. This is the 17th month in a row to see a year-on-year fall in the number of new listings. It was a similar story in the Tokyo metropolitan area with new listings down 22.7% from January 2020.

Remaining inventory also continues to see double-digit drops with greater Tokyo recording a 22.2% year-on-year drop …continue reading

    

In a polarised Asia Pacific, democracy should be a goal, not a club

Secretary of State Blinken (r) meets with President Biden (2nd r), Vice President Harris (2nd l), and national security advisers on 4 February 2021 in Washington (Photo: Reuters).

Author: Dan Slater, University of Michigan

Polarisation has torn the United States apart. Under former US President Donald Trump, it almost tore US democracy to shreds.

But America is not only polarised within. It faces a polarised Pacific. Relations with China have reached their post-normalisation nadir after Trump’s years in office, when Trump and Chinese President Xi Jinping propagated their strongman cults of personality in parallel.

With Trump’s departure, ironically, polarisation abroad could worsen — even as US President Joe Biden has hitched the success of his presidency to taming polarisation at home.

Republican hawkishness toward China during the Trump years was almost certainly tempered, at least on the margins, by the constraints of incumbency. A complete collapse in US–China relations risked making a massive mess on the Republicans’ watch. Now in opposition, the Republicans no longer have the responsibilities of power to hold them back.

However inadvertently, Biden’s fixation on internal unity could trap him in a downward spiral with China. In a time when Democrats and Republicans agree on virtually nothing, they are increasingly unanimous on the China threat. A shared enemy abroad can serve as a soothing balm for polarisation at home.

If Republican bellicosity towards China quickens, Biden might feel pressured to keep pace. First, to protect his flank from attacks of being ‘soft on China’ or being too permissive toward China’s deteriorating human rights record under Xi. Second, because it would give him at least one issue on which Democrats and Republicans can still come together.

The relentless global drum-beats of COVID-19 and climate change signal, loud and clear, that coordinated action among great powers like the United States and China is more vital than ever. Yet it feels more elusive than ever.

All the complexities of trans-Pacific politics are being flattened into an escalating US–China conflict. Just like …continue reading