Osaka’s The High Horie

Those who are considering diversifying their property investment portfolio in the Land of the Rising Sun will be glad to know that Keihan Real Estate Co Ltd is opening its latest development in Osaka to buyers from Malaysia. Called The High Horie, the project provides opportunities for rental income and offers a place for people to start their own businesses, says the developer, which aims to expand its reach internationally.

Keihan Real Estate representative Mayuko Takahashi says in an email interview that the vision of the Keihan Group appears in the phrase “global Keihan Group”.

“The goal is to welcome customers from around the world with a global perspective and to develop business across Asia,” she says.

“We have been selling our properties mainly in China, Hong Kong and Taiwan for about five years. This experience has helped us develop products based on the opinions of overseas customers. So far, we have developed products that satisfy not only Japanese but also overseas customers, and to continue making progress, we decided to sell in Malaysia.”

Established in 2000, Keihan Real Estate is a subsidiary of Keihan Electric Railway Co Ltd, which was founded in 1906. The holding company developed the railway links between Kyoto and Osaka, and engaged in property development along the railway line it set up. After some company restructuring, the real estate division was established and it developed and sold about 2,500 condominium units in Osaka city between 2014 and 2018.

Its latest project, The High Horie, is located in Nishi-ku, Osaka. According to Takahashi, it is a popular residential area with a young population, which is forecast to increase. Within the vicinity of The High Horie are amenities such as a hospital, a library, supermarkets, schools, parks and fashionable high-quality shops. The nearest metro station — Nishinagahori — is a minute’s walk away.

Osaka’s The High Horie

“This project is planned mainly for people living in the city centre such as singles, DINKs (double income, no kids) and those living in multiple residences or need closer access to their workplace,” says Takahashi. “In addition, we have designed common spaces and services that will support SoHo (small office/home office) use with the increase in remote work and side businesses, owing to the work-style reform in Japan.”

In recent years, the government has been reforming workplace practices. These include encouraging people to have side or multiple jobs. To cater for this new type of worker — who either is a freelancer, is someone who works from home or has his or her own small business — Keihan Real Estate created this SoHo product.

The High Horie occupies a 1,014.27 sq m parcel and has an estimated gross development value of ¥6.5 billion (RM262 million). The 12-storey project will have 141 units with three layouts — studio (22 units), 1-bedroom (105 units) and 2-bedroom (14 units). The built-ups will range from 325 to 798 sq ft, with a starting price of ¥29.4 million. There is an option for a guaranteed rental scheme for investors. Open for sale now, The High Horie is 47% taken up to date. The project is expected to be completed next January.

Osaka’s The High Horie

A unique feature of the development is that each unit can be registered as a business address, which owners of regular condos in Japan are not allowed to do. Among its facilities will be two common areas — a lounge area on the ground floor for residents and/or business owners to have open meetings with clients or guests, and a space with private meeting rooms.

The design of the units also differs slightly from that of typical Japanese high-rise developments. “A typical Japanese condo has a ceiling height of 2.4m to 2.6m while this project’s units will have a ceiling height of 3m to 3.55m. By providing a higher ceiling, it would be possible to partition the space not only vertically but also horizontally into lofts and storage spaces,” explains Takahashi.

The additional space would allow people to live and work in the same place. This flexibility, along with the shared facilities, will enable small businesses or freelancers to conduct their business in the same space without having to meet clients or guests elsewhere and incur additional expenses, she adds.

 

Condo market ‘is doing well’

JLL Japan head of international residential Kentaro Sato believes that Osaka’s high-rise market is a prime area for those looking to expand their investment portfolio. JLL Japan, assisted by JLL Malaysia, is the marketing consultancy for The High Horie.

“In central Osaka, the condominium market is doing well. One of the reasons is that the units are not that expensive in terms of price per sq ft. If you compare with condos in Tokyo, Osaka’s are priced 60% lower. So, it is still at a reasonable level,” says Sato.

Similar to big cities such as Tokyo and Fukuoka, Osaka is experiencing urbanisation. So many people from the surrounding areas, including Kobe and Kyoto, are moving to the city, he continues. “There has been a significant increase in population in the main central districts in the city. That is why condo sales in central Osaka are quite good now.”

From 2017 to 2019, condo supply increased 95% and the price index improved 103%, according to data provided by Sato. Moreover, the city’s population grew 101%, from 2.713 million to 2.74 million, and rent rose 105%.

The yield is higher [in Osaka] than Tokyo because Osaka is the second largest city or economic zone in Japan…The other reason [to invest here] is that Osaka is expected to have an integrated resort (IR) project. That is probably the main driver that has increased the interest of foreign investors,” he says.

In 2018, the IR Bill was passed in Japan, allowing for an IR with casino in up to three cities. It will take another year for the selection of the cities to be completed, but Sato says Osaka is highly favoured to be chosen. It is estimated that one IR with casino will generate 97,000 new jobs.

Meanwhile, there is a limited supply of residential properties in Osaka, as there are developers that buy land to build hotels, he explains. Owing to this competition for land, the supply of condos is expected to be controlled, leading to the units’ values holding, he adds.

Sato points out that infrastructure improvements to rail lines to the reclaimed island where the proposed IR will be located as well as to Kansai International Airport will also increase interest in and demand for properties in Osaka.

The steady growth of the Osaka property market looks set to continue if all goes well, says Tetsuya Kaneko, head of research and consultancy at Savills Japan.

“The overall residential market in Osaka is faring well. Rent went up about 2% last year, which demonstrates strong demand. Prices have risen 3% to 4% in Osaka city, but the transaction volume has gone down, owing to high prices like in Tokyo,” he says. “This moderate growth is likely to continue. Developers have strong balance sheets and no incentive to sell condos at a discount. They can wait for a long while.”

Kaneko believes the high-rise market has many investment catalysts, including “burgeoning inbound tourism, the casino, the 2025 World Expo and related transport infrastructure improvements”.

The infrastructure projects, as stated in Savills Japan’s May 2019 “Osaka Real Estate: Rebirth of a Market” report, include the large urban redevelopment project, Umekita Phase 2, slated for completion in 2023. It is expected to feature towers with office, retail and residential components, developed across 140,000 sq m. The report also states that Yumeshima, the artificial island that is the proposed site for the IR development and will host the 2025 World Expo, is also a catalyst for growth.

Furthermore, infrastructure additions such as the completion of the Umekita Station in 2023 and the Naniwasuji Line in 2031 are expected to shorten the travel time between Osaka Station and the Kansai International Airport by as much as 30 minutes, benefiting the investment environment.

Mari Kumagai, research senior director at Colliers International Japan, says the Osaka market continues to perform well, with average unit prices on an upward trend.

“With limited supply, the market condition remains in favour of developers. The average unit price has continued to trend higher at a CAGR (compound annual growth rate) of 5% since 2014, or reaching ¥708,000 per sq m as at end-2019. We expect to see a similar trend over the near term, although the downside risk has been increasing, with lower risk appetite as a result of the Covid-19 outbreak. A combination of tight supply, limited land supply for development and larger incoming institutional investments supports the ongoing market growth,” says Kumagai.

She points out, however, that while foreign buyers are allowed to purchase and invest in properties in the country, exiting may be a challenge because of volatility in the market.

Meanwhile, to ensure that Osaka remains in the minds of local and foreign investors, Keihan Real Estate plans to develop more projects in the city. “In the Kansai area, we plan to develop projects mainly in the six wards of Osaka city. Besides The High Horie … we also plan to build a tower project in front of Osaka Castle’s Otemon Gate as well as a tower project in the bay area, which has attracted attention, owing to the 2025 World Expo and the proposed IR,” says Takahashi.

 

For more information on The High Horie and or anything else that you'd like us to clarify, contact JLL International Properties at +603 2260 0700 or Wong.Christine@ap.jll.com

29 Apr 2020

New residential developments are transforming the neighbourhoods of Westminster, Victoria & Pimlico.

Westminster, Victoria and Pimlico located in the heart of Central London were once an office-dominated area, which morphed into a mixed use and bona fide residential in over a decade. Nearly all of these residential developments are largely borned out of the relocation of government departments from their traditional Westminster homes.

The large-scale, vibrant residential neighbourhoods built are prominent around Victoria station, whilst retaining the charm and distinction loved by so many residents.

 

Allure and Glamour of Central London

 

Westminster, Victoria & Pimlico areas are known for its Michelin star restaurants such as The Goring Dining Room, Quilon and A. Wong. Other Michelin star restaurants nearby include Marcus and Dinner by Heston in Knightsbridge, Amaya Grill and Bar, Celeste and Petrus in Belgravia, Hide and Gymkhana in Mayfair and Aquavit and Ritz Restaurant in St James’s.

Fascinating landmarks include Buckingham Palace, Houses of Parliament,  Downing Street, Big Ben, Westminster Abbey, Tate Britain, St James’s Park, Victoria Palace Theatre and Apollo Victoria Theatre.

A typical journey from Victoria Station would take residents to Oxford Circus (4 minutes), King’s Cross, St Pancras (8 minutes), Paddington (14 minutes), Liverpool Street (17 minutes) and Canary Wharf (19 minutes).

 

 

Younger students and scholars alike could live near to educational institutions such as University College London, King's College London, The University of Westminster, University of the Arts, London, Imperial College of Science, Technology and Medicine, London South Bank University, London School of Economics and Political Science and many more.

 

Strong positive growth and high affluent residents

 

JLL’s research has revealed that house prices in Westminster, Victoria and Pimlico would rise strongly after positive Brexit outcome, at 16% from 2019 to 2023. The outlook for rental growth remains bright post-Brexit, at 15% within the same period.

With 732 units under construction or in the planning pipeline, the house price growth in the London Borough of the City of Westminster has been exceptional over the past 20 years. Prices have increased by 368% during this time, an average of 8.0% pa. This is higher than the Greater London average of 311% and 7.3% pa respectively.

New-build pricing in the area currently averages £1,750 psf and typically ranges between £1,400 and £2,750 psf. Pricing can push above £3,000 psf in some high-specification and well-located areas. The high pricing levels mean that demand for apartments typically comes from domestic and international HNWIs.

Rents for a new or nearly new one bedroom apartment in the area typically range between £450 and £700 pw, while a two bedroom apartment can usually command a rent between £600 and £1,100 pw.

 

Featured Projects

 

The Broadway

The Broadway is the most high-profile scheme under construction. The Abu Dhabi Financial Group has partnered with Northacre to build out the six buildings planned at the former Metropolitan Police headquarters New Scotland Yard. There will be 258 private units. The prime location and high specification have meant that pricing for units is often in excess of £3,000psf.

 

9 Millbank

9 Millbank is a prestigious new build and refurbishment of a Grade II listed riverside address with iconic and panoramic views over London's famous skyline, located just a short stroll from Houses of Parliament. This St Edward scheme of 187 private units across two phases is due to complete in 2022. The current phase of 9 Millbank, Millbank Residences is just a short stroll from Westminster Palace and occupies a converted riverside location with views over the Thames.

 

No 1 Palace Street

No.1 Palace Street is located opposite Buckingham Palace, Westminster and adjacent to St James's Park - one of London's most sought-after neighbourhoods. This palatial development is an exceptional collection of 72 private apartments, across an island site comprising five different architectural styles.

Set in a unique location, directly opposite Buckingham Palace, the prestigious building has a long-standing affiliation with British Royalty. Built in 1861, the Grade II listed wing of the building, Buckingham Gate, was once the major landmark ‘The Palace Hotel’. It hosted distinguished guests of Queen Victoria, before the third wing of Buckingham Palace was built.

 

Chimes

Chimes in a new luxury residential development for over 60s in the heart of Westminster. It is a new residential development located on the Horseferry Road, SW1. There is a plethora of nearby famous cultural landmarks including Westminster Abbey, Palace of Westminster and the Tate Britain. The development benefits from convenient transport connections to Central London, with Westminster, Pimlico and St James’ Park and Victoria underground stations only a short walk away.

 

For more information on Central London and its latest residential properties, contact JLL International Properties at +603 2260 0700 or Wong.Christine@ap.jll.com.

14 Apr 2020

UK government plans to build up infrastructure and boost housing outside of London to create more opportunities for real estate investors. Rishi Sunak revealed that the £640 billion of investment would be utilized for road and rail projects, affordable housing, broadband and research, schools and hospitals over the next five years.

“Much of the emphasis on all the Budget spending announcements was about channelling funding into the regions to ‘level up’ the UK economy moving away from London-centric spending, policy and stimulus packages,” says Nick Whitten, head of UK Living research at JLL.

 

Having the right infrastructure in place

 

A £1.8 billion devolution deal has been agreed in West Yorkshire, which includes constructing integrated public transport networks and the redevelopment of Leeds station. A £2 billion Midlands Rail Hub plan for other regional cities, like Birmingham and Manchester is also in the pipeline.

Increased infrastructure such as schools and roads would have positive knock-on effects for housing supply.  “It should be the key to unlocking the door to building thousands of new homes across the UK,” says Whitten.

 

Boost innovation

 

Measures to boost innovation could support the growth of businesses in the life sciences and technology sectors.

Sunak pledged to increase the budget for research and development by £22 billion a year by 2024-25 and offered an increase in the tax relief for companies carrying out qualifying research, up from 12 to 13 percent.

Connectivity is also set to improve with £5 billion invested in gigabit-capable broadband. Furthermore, the Budget would be used to accelerate rapid-charging hubs for electric cars as part of a longer-term focus on ultra-low emission vehicles as part of the wider sustainability drive, while two carbon capture and storage clusters will create new jobs in the north of England.

 

For more information about UK investment opportunities, you may contact JLL International Residential at +603 2260 0700 or wong.christine@ap.jll.com.

07 Apr 2020

Over the years, Fulham is home to royal members, rock stars and tastemakers, and it is now popular with C-suite – boasting the highest number of company directors per capita in United Kingdom.

The leafy West London district, bordered by affluent London areas, Chelsea and Kensington, also houses multinational companies like Virgin group, Disney and other global firms in London. Major transport hub near Fulham commands high demand by professionals, whom sought after the high life without the high property prices.

The working age population increased by 13 percent between the 2001 and 2011 censuses, while the elderly population declined by 5 percent. Fulham is also popular with students and families with children, who appreciate its convenient access to world-class universities and outstanding local schools.

Public spaces, commercial facilities and residential schemes, which are backed by multimillion-pound investment scheme has turned Fulham to become a desirable place to live, work and invest, specifically on the historic King's Road.

 

Majestic setting

Backed by a rich history and distinctive royal approval, King’s Road was originally King Charles II’s private lane when he visited his palace at Kew.

King’s Road took a different turn at the heart of Swinging London in the 1960s when it became dominated with influential fashion designers and frequented by the likes of the Beatles, the Rolling Stones and Jimi Hendrix. The next decade saw it became an epicenter of punk.

King’s Road in present times, is known as a destination for sophisticated shopping, dining and culture.

Global fashion brands, cosmetic boutiques, antique stores, jewellers, restaurants and cafes like the prestigious Bluebird and The Ivy in Chelsea Garden lined the streets of Fulham and Chelsea.

The Saatchi Gallery and Royal Court Theatre in Sloane Square provides cultural experiences through its exciting and challenging contemporary artists and RHS Chelsea Flower Show brings the world's biggest flower show to the area each spring.

 

High quality education

Major universities in London are ranked amongst of the finest in the world, and many are in close proximity to a Fulham address. These include Imperial College London and University College London, King's College London and specialist institutions such as the London School of Economics.

With three London Underground stations, an Overground station and a nearby bus terminal at Hammersmith Broadway, Fulham property is well connected to the rest of London, the wider UK and international airports.

 

Fulham Regeneration Plan

The regeneration of Fulham is multi-layered, involving the improvements to existing public and commercial amenities and the creation of new spaces, business facilities and residential neighbourhoods.

The aim is to meet the demands of the growing population, which has increased 10 percent from 2001 to 2011. Aside from that, the refurbishment further develops the area’s potential as a commercial and investment hub.

In line with the Fulham Riverside Regeneration plan, developer St William would create 1,800 homes and 100,000 square feet of commercial space at King's Road Park, a six-acre site between the King's Road and the River Thames.

 

For more information on the investment potentials in King’s Road and other residential properties in London, click here or contact JLL International Residential at +603 2260 0700 or wong.christine@ap.jll.com.

29 Apr 2020

Visitors to the 2020 Olympic Games in Japan will find technology front and center. Autonomous taxis are set to shuffle visitors between the airport and sporting venues. Facial recognition will speed up security screenings for hundreds of thousands of athletes and staff. Automatic translation devices will be used to knock down language barriers.

Japan for decades has been a leader in technology and innovation. With ever-growing competition from Silicon Valley and China, the Olympics is being seen as a platform for the country to go beyond quietly leading the tech charge, to putting everything it has on the global stage.

“The Olympics has created a focus point for a government really seeking to advance their science and technology agenda,” says Naoko Iwanaga from JLL Japan Research.

According to the Tokyo Metropolitan government, an estimated ¥5.61 trillion (US$51.4 billion) is being invested into redeveloping areas of Tokyo and specific technologies from 2017 to 2020. More patents were filed in Tokyo than any other city in the world in between 2015-2017, according to JLL’s Innovation Geographies report.

 

Future technologies

Tokyo-based firm NEC has developed face-recognition technology that takes only 0.3 seconds to complete. The aim is to help speed up security screenings for over 300,000 athletes and staff expected to attend. It will be the first time such technology has been used at an Olympics.

Japanese tech giant Panasonic is developing a live translation device that allows people to communicate instantly face to face, reducing the language barrier that many tourists experience in Japan.

“The Japanese government sees technologies like these as a means to create a smart city that can serve the world as an international financial hub even after the Olympics end,” says Iwanaga.

Driverless vehicles will also be part of the experience. The Japanese Government wants them to be fully functional in time for the Olympics, and commercialised for regular public use by 2022.

Japanese robotics company ZMP has started trials for an autonomous taxi service in Tokyo. The cars are being trialled between Tokyo Station to Roppongi, so they can be used for spectators and athletes at the games.

All Nippon Airways, one of Japan’s largest carriers, has also been conducting trials for a driverless bus service inside Tokyo’s Haneda Airport with aims to get the service running by 2020.

“In addition to being useful at the Olympics, the government and companies alike see autonomous systems as a solution to traffic congestion and accidents, making Tokyo more safe, efficient and convenient,” Iwanaga says.

 

Building a National Strategic Special Zone

As part of the Olympic redevelopment, the Yaesu district on the south side of Tokyo Station – one of Japan’s busiest rail hubs – is slated for redevelopment as a National Strategic Special Zone.

The area currently has many smaller, multi-tenanted buildings. Plans are for them to be redeveloped into high-rise office towers, improving Yaesu’s international competitiveness and matching the modern Marunouchi Business District on the opposite side of Tokyo station,” Iwanaga says.

“The redevelopment of the Yaesu district will enhance competitiveness and attract talent and business globally, but also aims to improve connectivity to Tokyo Station,” she says.

 

Investing for long term

Alongside the innovation buzz, investment has become a talking point for the Japanese government and investors, both foreign and domestic.

Major Japanese investors such as KDDI, Toyota and Softbank Group have been investing heavily in tech entrepreneurship and venture capital sectors to drive innovation. Furthermore, Japanese companies such as JAL and Mizuho Bank have set up their own innovation centres to drive growth in the technology sector.

Foreign investment volumes have been growing, too, with ¥28.6 trillion (US$262 billion) of direct foreign investment in 2017, an increase of ¥300 billion (US$2.75 billion) from 2016. This put the country on track to meet Prime Minister Shinzo Abe’s goal of doubling foreign direct investment to ¥35 Trillion (US$320 billion) by 2020.

“Reforms for a data-driven society are being implemented to foster greater industry-academic-government collaboration, which would generate innovation for corporates and make the city more attractive for investors” says Iwanaga. “The hope is that the Olympics will bring about these changes even faster.”

 

For more information about Japan investment opportunities, you may contact JLL International Residential at +603 2260 0700 or wong.christine@ap.jll.com.

27 Apr 2020

In recent years, the waterfront area of Glasgow has become a new go-to destination for business. It was once a shipbuilding and industrial heritage, but the area has skewed towards office developments as it builds its reputation as a modern business district.

Financial service giants including JP Morgan and Barclays and public sector bodies such as HMRC are stepping in, with more to come as the southern bank of the Clyde undergoes wider regeneration.

Mike Buchan, JLL Glasgow lead director states that Glasgow has a compact city centre and finding the larger building footprint occupiers are increasingly looking for, is more difficult. Hence, people are realising the waterfront area is a good option because it has the space for companies to build appropriate scale of offices to their specification in a location close to the key Glasgow transport connections.

He further added that Glasgow’s skyline is certainly changing and there’s demand for taller buildings.

Similar to other UK cities, Glasgow-based businesses are seeking modern, flexible buildings with inspiring external environments and nearby amenities such as cafes, gyms and restaurants that will attract and retain skilled workers.

Barclays is creating a further 2,500 jobs at an office campus as part of the Drum Property Group’s Buchanan Wharf development in a move that is believed to be the largest recorded office deal in the UK regions over the past decade. The development would also include a further 360 build-to-rent apartments to help accommodate the city’s growing workforce.

JPMorgan Chase has also just announced the development of a new technology hub for 1,750 people on Argyle Street.

A £25 million investment in Custom House Quay to further improve the Quay walls, aims to pave the way for future redevelopment and usher in a new chapter for the area as a vibrant place to work and socialise.

Future plans include a mixed-use scheme in the Candleriggs Quarter which would combine offices and homes with shops and leisure. Further along the waterfront towards the west end, a £100 million retail outlet are planned with restaurants, shops and a cinema.

“Glasgow City Council are acutely aware that Glasgow’s highly-regarded universities are producing the talent the city needs to thrive; now it’s all about providing the right environment and community to encourage them to remain in the city after graduation,” says Buchan. “Glasgow is facing competition from the major UK regional cities and beyond, therefore new commercial and residential developments are essential for the future success of the city.” 

 

Redeveloped train stations

Investments in train stations, as part of wider infrastructure projects, have aimed to position UK towns and cities as well-connected destinations.

This include the transformation of Manchester’s central Piccadilly station to host the planned HS2 high speed rail link, as part of a bigger development to create a new city district with 5,000 homes, 250 hotel rooms and hundreds of offices and shops. The project also include the £161 million revamp of Leeds Central Station to make the station a hub for national services, as well as remodel the surrounding roads and build over three million square feet of shops, offices and restaurants.

“The modern rail project can be transformational,” says Charles Pinchbeck, Head of West End Development at JLL. “Train stations are an integral part of placemaking schemes, offering the accessibility that is a key factor in the regeneration of an area.”

 

Successful Placemaking

Good design plays a critical role when it comes to the use of space surrounding the architecture of the building, whilst companies and homebuyers increasingly prioritise wellbeing and sustainability.

“Placemaking is one of the greatest trends of the century – people don’t just want to be in buildings, they want to be in places. The quality of the environment is absolutely crucial – is it healthy, stimulating and sustainably built?” says Pinchbeck.

“Accessibility was not the catalyst for the regeneration, but the making of the place itself,” Pinchbeck added. “For a redevelopment scheme to succeed in boosting the economy and improving quality of life, it needs to offer good transport links as well as a curated retail, office and leisure environment with high-quality buildings to create the places where people want to be.”

As towns and cities across the UK look to attract a new wave of businesses, investment and people in the coming years, trains stations will continue to be at the heart of urban modernisation projects.

 

For more information about UK investment opportunities, you may contact JLL International Residential at +603 2260 0700 or wong.christine@ap.jll.com.

27 Apr 2020

International investors are targeting Japan’s ‘living’ sectors - new niches in the residential market which are being driven by demographics and changing lifestyles.

In June last year, Aberdeen Standard and Sumitomo Mitsui Trust Real Estate Investment Management announced a joint venture to invest in multifamily, senior housing, student housing and corporate housing in Japan, primarily in Tokyo and Osaka.

Multifamily is rapidly becoming an institutional real estate sector in Japan, with vehicles launched by groups such as UBS and Nuveen, however senior living, student accommodation and co-living are establishing their credentials.

“In terms of yields, these three sectors can offer investors a 50-100 bps premium over the multifamily sector, which ought to draw out more interest in these sectors over the longer term, says Koji Naito, director of JLL Capital Markets, Japan.

Japan is famously the world’s oldest nation, with 35 million people aged over 65, and its rapid ageing is driving demand for senior housing, primarily in the aged care sector - nursing homes rather than independent living accommodation for retired people.

Aged care, especially that catering for the over-75s, is booming, says Nick Wilson, head of Asia Pacific capital markets research at JLL.

“The government is not rolling out many public sector facilities and instead is providing development incentives to encourage more private facilities. With long wait times in the public sector, demand is rising.”

 

Foreign student accommodation and co-living spaces

Japan is targeting an increase in foreign students in order to promote itself as an international location. It is seeking at least 300,000 foreign students each year and fell only slightly short in 2019, with 298,980 registered.

Domestic investors Itochu Corporation and Mizuho Financial Group have launched student housing brands, as has international sector specialist GSA, in partnership with Star Asia Group.

“In Japan, the current stock of student housing is very old and outdated, which is normally unacceptable for overseas students. Due to the growing number of international students, investors can see a huge opportunity for the sector, to meet the need for high-quality properties,” says Naito.

Modern specialist student accommodation may also attract Japanese students,” says Wilson.

“Domestic and overseas students may find it difficult to get leases with private landlords, who often require additional insurance or deposits. The upfront costs to get into private rentals is usually around three to five months of rent. Student housing concepts bypass this hefty upfront cost and provide furniture and utilities, making them a turnkey solution.”

Co-living, where landlords provide shared services and facilities for renters of small residential units, is at its early stages in Japan, which is “behind other global markets,” says Naito. However, a number of domestic co-living brands have been launched, including Sakura House and Bamboo House, both of which started out providing rental apartments to foreigners, but which have branched out into the new sector.

Shared housing is less common in Japan than in other developed nations, but the rise of the sharing economy is likely to encourage new modes of living. Co-living also bypasses the up-front expenses required by private residential landlords.

 

Finding right resources for new living sectors

A key differentiator for all three living sectors is their operational requirements.

Aged care facilities require specialist staff and management, as does student housing. The most successful co-living brands offer the same services over multiple locations. However the operational element of these businesses is not necessarily a negative for real estate investors,” says Naito.

“Many properties in these sectors are owned by the operators, so a relationship with operators is potentially one of the best ways to source product.”

 “Student housing and aged care are usually leased on long term agreements. For aged care leases can be more than 20 years, so there are additional benefits from a long-term investment standpoint,” says Wilson.

 

For more information about Japan investment opportunities, you may contact JLL International Residential at +603 2260 0700 or wong.christine@ap.jll.com.

27 Apr 2020

From sustainability to the need to find new urban living solutions, what do the next 12 months have in store for UK real estate?

Amid Brexit, climate change and concerns about corporate social responsibility, real estate is at a turning point.

Today’s companies are increasingly having to rethink old business models and outdated workspaces to find new ways of working - and driving growth - that not only boost productivity and engagement among employees but also support the environment and add value to communities.

Investors are increasingly exploring new real estate sectors that can deliver both strong returns and fresh solutions to the growing challenges facing rapidly urbanising and ageing societies. From city warehousing to new styles of urban living, 2020 will see emerging trends gain traction. Landlords, meanwhile, are increasingly spending time curating buildings to create vibrant, amenity-filled spaces.

So just what does it all mean for the UK’s property market in 2020? Here’s our take on some of the key trends to look out for over the next 12 months:

 

1: Growing pace of urbanisation

Urbanisation shows no sign of slowing, says Jon Neale, head of UK Research at JLL. “By 2025, we expect there to be an extra 2.5 million people living in the UK’s city centres.

“As these urban populations expand, so will demand for housing, shops, leisure facilities, warehouses and office space. Real estate will need to adapt as competition for space intensifies; whether that’s offering flexible workspaces or multi-storey warehouses.”

City centre jobs growth will likely be focused on the tech and service sectors, with companies battling to attract the skilled workforces they need to thrive. Sectors like life sciences will be affected as this increasingly means locating in urban innovation clusters that offer coworking spaces to encourage collaboration.

 

2: Adopting a more sustainable point of view

Climate change remains high on the agenda with the UK Government committing to hit net zero carbon by 2050. The focus will be on mapping out the journey ahead to ensure buildings and operations meet ambitious net zero carbon goals.

Companies will also pay closer attention to their social impact in their decision-making. Air pollution, for example, will become a key consideration for both businesses looking at new offices and workers choosing where to live.

 

3: An office is no longer just somewhere to work

Changing work styles will continue to reshape traditional office spaces in 2020. Landlords are increasingly aware of the need to create people-centric spaces and are spending more time ensuring they have the right mix of tenants and amenities, especially as leases shorten and tenant expectations rise.

New uses like bike storage or electric vehicle charging, for example, are being added to the mix. Meanwhile, in-house cafes and restaurants serving a variety of healthy and high-quality food are providing the hospitality services that modern employees want.

Building design and management will also become more focused on health and wellbeing. Creating well-designed spaces, with good lighting and heating systems, or quiet spaces away from the hubbub of open-plan offices can all help boost employee productivity and engagement.

 

4: Growth of new urban housing solutions

As more people move into cities, new urban living solutions will be needed. Neale says the Build-to-Rent sector will grow rapidly in 2020.

“As urban life gets more expensive, the benefits of renting, rather than home ownership are becoming more apparent in these city locations,” he adds.

Co-living providers are expected to move out of London to other urban centres and retirement living schemes offering amenities, and care where needed, will grow.

 

5: Technology becomes more integrated

2020 is the year companies will invest heavily in tech and data as digital solutions gain momentum.

“Technology investment will be all about improving the day-to-day employee experience,” says Neale.

Everything from sensor-based lighting systems to using workplace apps to book meeting rooms can be good for companies’ sustainability goals and their finances.

As Neale says: “Crucially, these changes will also drive performance or efficiency benefits.”

 

For more information about UK investment opportunities, you may contact JLL International Residential at +603 2260 0700 or wong.christine@ap.jll.com.

27 Apr 2020

A surge in foreign transactions is expected as investors aim to beat the April 2021 deadline

 

British Chancellor Rishi Sunak has announced a two percent stamp duty increase for non-resident home buyers from April 2021 in the first Budget of the new Conservative government. This will affect all residential property transactions in England and Northern Ireland from next year, but not those in other UK regions. The Chancellor confirmed on Wednesday that money raised from this levy will contribute to building 6,000 new homes to help tackle the homeless issue in the UK.

An increase in stamp duty has been long anticipated, and this is lower than the three percent previously suggested in the Conservative party manifesto. Although tax increases are never popular, stamp duty on housing has proven a successful source of revenue for the government. Previous tax changes have been criticized for contributing to the slowdown of London property markets over the past few years, but the real impact on transaction volumes is unclear.

Other housing measures included in Budget 2020 were a further £12 billion and a timeline extension for the government's Affordable Homes Programme and an additional £1 billion to remove unsafe combustible cladding materials from older housing schemes. Not included was former Chancellor Sajid Javid's proposed 'mansion tax' that would have increased duties further on high-value homes.

 

How stamp duty works

 

Stamp duty on UK property increases according to value. Currently, there is no stamp duty on UK homes valued at less than £125,000 (up to £300,000 for first-time buyers). This increases up to 12 percent for homes costing more than £1.5 million and there's an additional three percent surcharge when buying a second home.

This means that, from April 2021, overseas property buyers could pay as much as 17 percent total stamp duty when buying expensive homes in England and Northern Ireland (not applicable to property in Scotland, Wales or other UK regions). Those who become UK residents after paying this surcharge may be entitled to claim a refund.

Real estate firms expect to see a surge in foreign transactions before the new tax rule comes into effect. Overseas purchases are then forecast to decline in the rest of 2021 before stabilizing again by 2022–23. At present, around 70,000 of the UK's 1.2 million annual property transactions are overseas purchases, particularly in investment hotspot London where many large-scale developments primarily target foreign buyers.

 

UK property still affordable

 

The stamp duty hike has faced criticism for potentially stifling the UK property markets just as they were beginning to recover from years of investor uncertainty. However, London will remain a competitive city by global standards even after the increase, especially in comparison to expensive alternatives such as Hong Kong, where overseas buyers pay an additional 33.3 percent tax on top of the purchase price. With foreign investors in the UK having benefited from the weakened pound in recent years, the move is seen by some as leveling the playing field for domestic buyers.

Nick Whitten, Head of UK Living Research at Jones Lang LaSalle (JLL), said: “The change in the rate of stamp duty for international investors was anticipated as part of the government's priority to 'level up' the distribution of wealth in the UK. However, it is vital to strike an appropriate balance in meeting this priority and enabling international investment which currently plays such a crucial role in unlocking the development of thousands of new homes in London and the UK's major regional cities.

“We welcome the delayed introduction until April 2021 to allow developers to explore options to adjust their delivery models. But time will tell what the long-term impact of the increase is, and whether it will threaten the future attractiveness of the UK and the viability of some housing schemes already in the pipeline.”

JLL forecasts moderate growth of one percent in the UK residential markets through 2020 as investor confidence slowly returns following Brexit. This is expected to increase to four percent per annum by 2022, when the more positive investment climate becomes better established.

 

For more information about residential properties in London and the United Kingdom, please contact JLL International Properties at +603 2260 0700 or Wong.Christine@ap.jll.com.

24 Mar 2020