Shortage in supply of new-built condominium pushes up demands in resale market

The sustainable growth of the Japan property market has been supported by a steadily-growing population in the metropolitan areas. As such, the shortage in supply of new-built condominium is leading more people to turn their eyes towards relatively new condominiums in the resale market. The Japanese traditionally favor new-built housing, but the recent trends tell us that there has been a change in the people’s perceptions in the age of a building or property. Today, we will look at more insights of the recent trend in resale market. Demand of housing remains strong The population growth in metropolitan areas like Tokyo has been showing a steady increase. COVID-19 has changed our living and working styles in various ways, but the impact on housing demand is limited. Market observers commented that more people from the city central areas are moving to spacious houses in country side because of working from home (WFH) was being introduced during the state of emergency in April 2020. Indeed, according to the survey by Tokyo Shoko Research survey, 56% of companies adopted WFH at the time. However, in August, the companies still continuing with WFH reduced to 34.40%.

 

Demand of housing remains strong

The population growth in metropolitan areas like Tokyo has been showing a steady increase. COVID-19  has changed our living and working styles in various ways, but the impact on housing demand is limited. Market observers commented that more people from the city central areas are moving to spacious houses in country side because of working from home (WFH) was being introduced during the state of emergency in April 2020. Indeed, according to the survey by Tokyo Shoko Research survey, 56% of companies adopted WFH at the time. However, in August, the companies still continuing with WFH reduced to 34.40%.

Large companies have higher adoption rate of 61.31%, which is almost double that of mid-to-small size companies.

However, in terms of participant rate, majority of large companies responded that no more than 30% of their employees actually WFH. Even so, it was often not full-time complete WFH but a partial one, i.e. biweekly or a few days in a week. Therefore, relocating to country side is not a practical option for the majority, as commuting to work is still required and thus good connectivity still remains important.

Looking at the demographic movement in Tokyo, COVID-19 did affect the population movements, but not to the extent to call it as a population outflow. Indeed, demography by nationality showed the decrease in population was largely contributed by foreign residents returning back to their countries. As of August 1, Japanese population has increased by 58,114 comparing with January, while foreigner population has reduced by 4%.  

In the long term, population growth is still in an upward trend. On year on year basis, the Japanese population in metropolitan areas is increasing, despite the state of emergency was announced in April to May period disrupted the usual influx of people expected for every new school year and fiscal year starting in April.

 

Fortunately, real estate sales activity has sprung back to what it used to be before COVID-19. There is still a great demand for condominiums from the local owner occupiers and the decrease of foreigners do not seem to affect sales. When businesses resumed after the state of emergency, local buyers started actively looking for housing like before. On year on year basis, there were even more transactions in the resale market in August.

Shortage of supply in new-built condominiums

In recent years, the supply of new-built condominiums in Tokyo has been decreasing, despite of the growing population and housing demands. The choice limitations turned buyers to the resale market for secondary alternatives. Land acquisition has always been very competitive in the already developed central areas in Tokyo. As city urbanization continues, the shortage of supply in new-built properties is expected to push up the demands of resale apartments.

The next graph shows the transaction volume of resale versus new-built properties in Tokyo 23 wards over the past ten years. The transaction volumes of resale market showed increase gradually, as the new-built condo supply slowed down after 2013.

Properties below 20 years are actively sought after

New-built housing has always been the most preferred option for Japanese, because historically, houses in Japan were built by wood. It was believed that the newer the house, the better would be its durability. However, the situations are different today. With fewer new-built options and the advancement of superior construction qualities, resale apartments are generally now more accepted.

As more buyers opt for resale markets as a substitute for new-built apartments, it resulted in the majority of transaction volumes concentrated in the relatively new buildings with age below 20 years. In terms of the transaction ratio against the supply, the building aged between 6 to 10 years shows the highest demand last year, followed by those of 11 to 15 years, 16 to 20 years and 0 to 5 years.

 

Recommendation is up to 15 years old

The observations showed that transaction volume zone is within 20 years old and so, investing in property below15 years is the best recommendation with consideration of the exit timing as well. Although buildings of 20 years old might sound “old” for overseas investors, the locals feel differently. Although traditionally the Japanese adore new-built properties, nowadays more people are realizing that the construction qualities after the millennium 2000 have become excellent to provide strong durability. Especially properties from established developers are well-maintained in very good conditions, which makes it no big difference to the new-built ones.

Many Japanese developers have their own prestige brand names for their condominiums. Therefore, they put in their utmost efforts in maintaining their quality and reputation. Often, the building management is by developer’s subsidiary company so as to make sure the same brand quality is achieved.

Because of the superior construction quality, it is unlikely that owners of such condominiums will need to pay substantial amounts for maintenance in the first 10 years. That is why many property management companies offers guarantee plans that cover minor repair costs, as there is not much pay out expected during this period of time.

After the first decade, some replacements of appliances like air-cons, dishwashers, water-heaters may be required due to service lifespans, but in general, the properties will look no inferior to new-built ones and are equally competitive in the markets.

 

Property price continues to grow in prime locations

Both resale and new-built condominiums in Tokyo have been on a steep price growth since 2013. The growth until 2016 were largely affected by the great expectations towards Tokyo Olympic game, which has brought significant impacts on the property markets not only in Tokyo central, but also to surrounding areas. The growth in the most recent couple years was due to more sustainable and rational factors. Good connectivity, prime locations, redevelopment and superior quality apartments are enjoying appreciation, whereas those properties without these factors are being left behind from the continuous growths.

The demand for a good property in terms of quality and location is expected to remain strong in central area, as working in office is still a daily norm for majority. The shortage of new home supply will still continue, as land acquisitions will remain competitive in prime locations, which in turn can push up values of the existing good properties. It is therefore a good opportunity to widen your options to consider resale properties with strong growth factors.

 

 

For more information, please contact:

Christine Wong (REN06667)

M: +6012 908 6318

E: wong.christine@ap.jll.com

 

 

 

03 Nov 2020

Real estate in the United Kingdom (UK) has always been a hit for Malaysian property investors. Besides being viewed as a highly-favoured study destination, UK real estate had always boasted strong capital growth and steady rental yield.

However, with the noise on UK’s withdrawal from the European Union (Brexit), coupled with the upcoming challenging winter season and rise in Covid-19 cases which Prime Minister Boris Johnson has labelled a second wave of virus, will the UK retain its appeal as a property investment hotspot?

 

It is noteworthy that UK house prices soared to record highs last month since 2016 August despite the Covid-19 crisis, with market observers attributing this to the stamp duty cut and pent up demand.

Whether this trend is a flash in the pan is anyone’s guess.

Slight recovery in 2022

Property consultancy firm JLL Research head of UK Living Research Nick Whitten points out that UK is the sixth largest economy in the world, with London being the capital city. Other notable cities include Birmingham, Manchester, Glasgow, Liverpool, Bristol and Edinburgh.

 

 

Whitten is more conservative about the market. The lockdown period severely affected transaction volume and he expects average house prices to drop about 8% this year, remaining flat in 2021 before recovering to 3% in 2022 and 5% in 2023 and 2024.

For Greater London and prime Central London, he sees prices rising as high as 6% and 7% respectively, in 2022.

What investors should note are areas marked for regeneration. The infrastructure in these areas is being upgraded by public initiatives and new homes built by private enterprises.

“Notable hotspots include Whitechapel with the upcoming Crossrail station that connects East and West London on high speed rail. In 2016, JLL produced a research report which reviewed all the 42 Crossrail stations. This document researched aspects like price growth, rental demand, lifestyle and the general impact on the area. Whitechapel was in the top spot for price growth out of all 42 stations,” says Whitten.

Whitechapel is located two minutes away from the City of London and three minutes from Canary Wharf, one of the three core Financial and Business Services (F&BS) employment locations in London in large part responsible for the capital’s emergence as Europe’s premier financial centre.

Will London remain a good property investment choice? JLL Property Services Malaysia Lead of International Residential Christine Wong believes so, thanks to its undervalued currency, relatively cheaper stamp duty compared to other major cities and strong economic fundamentals.

“The 2020 UK Budget has announced a 2% rise in stamp duty for foreign buyers effective April 2021 — completed purchases before that date will pay the same as domestic investors. The Sterling Pound is also undervalued with the pound to dollar exchange rate at US$1.40 as compared to May this year at US$1.23 and pre-Brexit in 2016 at US$1.48,” says Wong.

Contributed by NATALIE KHOO / EDGEPROP.MY

Published on September 25, 2020

29 Sep 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

JLL International Residential is pleased to present our latest portfolio with comprehensive market updates and the collections of oversea properties across the world.

Welcome to contact us if you would like to know more about overseas investments.

 

Download Portfolio

05 Feb 2020

The all-new Embassy am Köllnischen Park is situated in Berlin-Mitte near the Spree River, between Berlin’s diplomatic quarter and Gendarmenmarkt. The art and cultural scene, the surrounding embassies and the historic center with numerous sights are among the highlights of Embassy’s prestigious location.

With a quiet neighbourhood and almost village-like charm, future residents get to take stroll along the heritage-listed Köllnischer Park and witness the historical, almost sacral walls of the Märkisches Museum.  Convenient connections to Berlin’s transport system make the Embassy the ideal starting point for exploring the city.

Thomas Zabel, Head of Residential Development from JLL Germany stated that Embassy is an extraordinary project – both in terms of its architecture and location. The quarter around Köllnischer Park could well become one of the most sought-after locations in Berlin-Mitte over the next few years.

Karina Boer, COO from Adam Europe GmbH, on the other hand, mentioned that Adam Europe is delighted to create an oasis of upscale living in the historic center of Berlin, where residents are both right in the middle of the action and at the same time can savor peace and tranquility.

“This is our second major residential project in the city and we hope that future residents will feel at least as at home in Berlin as we do,” she further added.

Developed by Adam Europe and designed by architect, Sergei Tchoban, the Embassy consists of 130 condominiums ranging from 36 to 160 sqm and an underground parking garage.

 

 

Other Featured Project

EDEN

 

 

EDEN, is a living masterpiece located at a prime location in Frankfurt. Its exceptional design concept, the high-quality fittings and furnishings, and dedicated shared spaces make EDEN an icon of sophisticated living. At the same time, it offers peace and quiet, enabling residents to retreat and relax or, alternatively, meet up with friends and neighbors.

 

Event Highlights

To gain your latest market updates on German property, real estate law and taxes, register for our event at the following link: -

 

https://internationalresidential.jll.com.my/event-calendar/28/may/2019/eden-embassy

 

For further information contact JLL International Residential directly at +603 2260 0700 or wong.christine@ap.jll.com

 

27 May 2019

A co-research between JLL and JOYN Coliving has revealed that Lisbon and Porto are among the 40 most desirable cities for co-living and there is an estimated potential demand for 16,000 to 18,000 co-living beds.

These demands are made out of digital nomads who stay for short periods of time, expatriates whom are working in Portugal, entrepreneurs whom sought business opportunities, local and international students and young workers between age 20 to 35 years old, a bachelor’s degree holder with salary more than €1,200 net salary per month and live alone or with a wife or husband with no children.

Another survey done among the 300 expats and digital nomads community in Lisbon further revealed that 79 percent would live in a co-living space with 42 percent already lived in a co-living space abroad. More than half are planning to stay in Lisbon more than a year with the majority paying a monthly rent less than €400 and flat sharing with others.

Portugal Managing Director, Pedro Lancastre stated that there are increasing number of international companies entering the country, more young professionals, more expats, and a thriving entrepreneurial system. In other words, the “substance” of demand for this new way of living and coexisting.

Lisbon has also three ranked institutions and is the third most dense student city at 22.5 percent. Millennials are another targeted group for co-living spaces as they are increasingly demanding and international in their way of thinking and living. They seek for flexibility, experience and being always connected.

 

 

Shared Economy, New Lifestyle

The collaborative economy and technology are changing and revitalizing cities.

Buying a house, owning a car and the concept of allocating possessions was initially the main driver of peoples’ success, however, currently given the huge changes in technology, less is more.

Sharing helps foster a sense of community. A collaborative system encourages the new generations to pay or share products and services by consumption, rather than owning them. They prefer to share experiences and spaces with basic amenities and services, resulting in renting being the new norm.

“Co-living is a lifestyle – a complete revolutionary way of life. These generations, which constitute the majority of Portuguese talents and those who are coming to Portugal, are the engine of the domestic new labour market force and the great differentiation and ultimately what they truly value - experience,” Pedro says.

Technology and the digital world further boosts flexibility, connectivity and accessibility to users who could currently easily find everything through mobile applications. The shifts fostered new ways of working thus there are more freelancers, self-employed workers and digital nomads working remotely.

Source: JLL

 

Why Invest in Living Alternatives?

Cities of the future will be measured by sustainability, flexibility and liveability.

The maturity of living segments varies across Europe, however in most markets co-living sectors remain at a fairly early stage presenting an opportunity for first movers. Aside from that, the proportion of renters to home owners is expected to rise as house prices across major markets have outpaced rents.

On the demand side, tenants have shown they are willing to pay a premium for the convenience of flexible lease terms, furnished units, housekeeping, fitness centres and co-working spaces, all in one place and included in one price.

The expected return for these living segments varies according to geographic and sub-sector level differences. In comparison with traditional residential sector, these living segments are expected to outperform given their better use of space with floor plans being increasingly dense, more efficient building management and generally higher entry yields.

A compression of yields is expected through management efficiency and rental income growth as the co-living market matures. Furthermore, the operating returns make these living segments very attractive on a risk-adjusted basis.

 

 

Future of co-living

International and national private investors and operators already represent a pipeline of about 570 co-living beds in the next 2 years to cater to demand needs and expectations.

“As a real estate product, co-living is a very interesting model for investors and developers, with attractive returns and a demand base that promises exponential growth. By 2035 alone, 1,000,000,000 digital nomads are expected in the world! Portugal is a market of great potential for the development of co-living,” Pedro says.

He further added that co-living is a new trend and amazing market that will surely turn into a success.

The largest co-living project is located in the Lisbon city centre, offering more than 300 beds and hundreds of co-working stations. A co-living project, Smart Studios develop 114 beds in Santa Apolónia, aiming to target the thousands of young professionals and digital nomads working in the Beato Creative Hub.

Porto has 40 beds in pipeline operated by B-Hive Living. Cascais municipality is taking the lead in developing a template for further public-private partnerships aiming to build housing for all under the co-living context and the Porto Municipality expects to launch a public tender for the co-living project in the city centre.

 

For more information on co-living spaces and Portugal residential opportunities, you may contact JLL International Residential at +603 2260 0700 or wong.christine@ap.jll.com.

29 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