Today we'll be roughly summarising large scale redevelopment, with a focus on Tokyo. Since redevelopment has a big effect on land and real estate prices, it is one very important point to bear in mind regarding real estate investment. In the same region since redevelopment surrounding Marunouchi began around 2000, it has been began expanding to Otemachi, Nihonbashi, Yaesu etc. Starting with Mitsui Fudosan and Mitsubishi Estate, real estate giant have unanimously been pushing for development.
As of 2016 Mitsubishi Estate's "Otemachi Park Building" and "Otemachi Financial City Grand Cube" are already complete. Similarly, the Tokyo station Nihonbashi exit front "Tokiwa Bridge City Block Redevelopment Project" that Mitsubishi Estate are dealing with, led by a 390m tall skyscraper, is a massive scale project covering an area of over 31,000m2. Further, Mitsui Fudosan with its "Nihonbashi Revitalisation Stage 2" are planning complexes such as offices, Hotels, and commercial facilities in Yaesu Ichome's northern district, and Nihonbashi Muromachi's Nichome and Sanchome.
In addition, there is a flood of big development projects spanning from Ichome to Sanchome (First block to Third block) in Otemachi, such as government buildings, communications offices, or the former Tokyo International Post Office. Aside from the Tokyo station area, Toranomon or Shibuya station areas, Shinagawa that aims to be "Tokyo's doorstep", Harumi and Toyosu areas that plan to have construction related to The Tokyo Olympics, all have plans meaning there are more important development projects than you can count on both hands.
Going forward, combining constructions plans that individually exceed 10,000m2, the number seems to reach approximately 18 million m2 (According to a report by Nikkei Architecture).
That's equal to over 2,500 soccer pitches, and almost the same area as Shinjuku ward. Among them, just under 80% are scheduled to be completed before the 2020 Olympics.
With the background of this redevelopment rush, the trend of land price rises in urban areas continues. However, some major wards such as Chiyoda, Chuo, and Minato, etc, have nearly risen to their bubble era real estate prices from the 1990s. Due to this, price rises may be limited, but it will certainly be a factor in supporting land prices.
On one hand, in Tokyo suburbs and regional cities there are still many areas with land prices stuck at low levels. Currently Chofu or Fuchu, or Tachikawa in Tokyo, a well as regional cities like Nagoya, Osaka or Fukuoka etc, are seeing active redevelopment. All of Japan seems to be involved in this redevelopment rush, and this seems certain to lead to increased land prices.
Sep. 13, 2016