Category Archives: Japan

Japan allows Airbnb to operate finally

According to Bloomberg, Japan’s upper house passed a bill last week that lets private homes rent out space to paying guests — limiting total stays to 180 nights a year. The law requires providers of such accommodation to register with local governments and lets local authorities impose their own restrictions.

Airbnb Inc. will thus now be able to operate in Japan legally after the government passed a law that sets out rules for home sharing. It is more well-received in Japan, compared with the encounters it had with New York, Barcelona and San Francisco. A tourism boom has cut into Japan’s supply of available hotel rooms and helped make the nation Airbnb’s fastest-growing market. The number of visitors from overseas will probably continue to reach records as Japan prepares to host the World Rugby Cup in 2019 and the Olympic games the following year.

Japan’s home-sharing limits are relatively lenient, compared with 90 days in London and 60 days in Amsterdam. The new law also distinguishes between those who share their own dwellings and absentee landlords, anticipating that the latter are more likely to be a source of friction in neighborhoods.

For those hosts that decide to stick with it, the good news is that demand will only continue to grow. More than 24 million tourists visited Japan in 2016, topping the record for a fourth straight year, according to the nation’s tourism organization. Airbnb accommodated 3.7 million of those visitors, according to the company. The government aims to raise the number of visitors to 40 million by 2020.

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Singapore Property Giant bought Japanese commercial properties for almost 50B yen

CapitaLand, through its mall business CapitaLand Mall Asia, acquire a portfolio of four office and retail properties in Japan’s Greater Tokyo Area, for about 51 billion yen (S$636.3 million) including transaction costs.

CapitaLand currently also owns and manages four shopping malls in Japan – namely Olinas Mall, Vivit Minami-Funabashi and La Park Mizue in Tokyo; as well as Coop Kobe Nishinomiya-Higashi in Kobe.

The Ascott Ltd, CapitaLand’s wholly owned serviced residence arm, owns and manages 46 properties with more than 3,500 apartment units in Japan. The group’s Japan portfolio also includes a 20 per cent stake in an office building – the Shinjuku Front Tower.

The acquisition will strengthen its foothold in Greater Tokyo, the world’s most populous metropolis, and increase the group’s total asset size in Japan to about S$2.5 billion.

The portfolio comprises two office buildings in Yokohama, Yokohama Blue Avenue and Sun Hamada; one office building in Tokyo, the Kokugikan Front; and, one shopping mall in Saitama, the Seiyu & Sundrug.

The long-term forecast of Greater Tokyo’s office market remains positive. The vacancies in central Tokyo expected to stay below 5 per cent through to 2025.

The Seiyu & Sundrug has a gross floor area (GFA) of close to 400,000 square feet, thus growing CapitaLand’s retail footprint in Japan by about 25 per cent to over 2 million sqft in GFA. Seiyu & Sundrug, in Saitama Prefecture, is the largest suburban mall within a three-kilometre radius.

Airbnb gets green light in Japan

Airbnb Inc. is finally getting the green light to do business in Japan after years of operating in grey areas of the law.

Airbnb, which just closed a $1 billion funding round that valued the company at $31 billion, has found a more receptive audience in Japan, compared with the clashes it had with municipal governments in New York, Barcelona and its home town of San Francisco. A tourism boom has cut into the supply of available hotel rooms and helped make the archipelago Airbnb’s fastest-growing market. Overseas visitors will probably continue to set records as Japan prepares to host the World Rugby Cup in 2019 and the Olympic games the following year.

Prime Minister Shinzo Abe’s cabinet approved rules on Friday that limits home-sharing by private citizens to 180 days a year, according to the final draft of the legislation. The bill, which also leaves room for local authorities to impose their own restrictions, is now submitted for deliberation and approval by Japan’s parliament.

The new legislation, which still needs to pass Japan’s Diet, distinguishes between those who share their own dwellings and absentee landlords, anticipating that the latter are more likely to be the source of friction in neighborhoods. While Airbnb doesn’t break down its 48,000 listings in Japan by type, a search on its site shows hundreds of houses available for rent, as opposed to rooms in occupied homes. About 90 percent of hosts that aren’t present on the premises said the 180-day restriction would make their businesses unfeasible, according to a survey by the Japan Association of New Economy last year.

Airbnb, like its ride-sharing counterpart Uber Technologies Inc., has faced resistance from local authorities. Still, Japan’s home-sharing limits are relatively lenient, compared with 90 days in London and 60 days in Amsterdam. Still, for some hosts in Tokyo, the new rules may force them to choose between giving up a second source of income and committing to becoming a full-time rental property operator. Until now, high occupancy rates in popular neighborhoods such as Shibuya and Asakusa made it possible to make a profit on rented apartments, prompting people to take a second or third lease. The legislation would require a landlord’s permission and an operating license.

For those hosts that decide to stick with it, the good news is that demand will only continue to grow. More than 24 million overseas tourists visited Japan in 2016, topping the record for a fourth straight year, according to the nation’s tourism organization. Airbnb accommodated 3.7 million of those visitors, according to the company. The number will hit 35 million by 2020, Goldman Sachs Group Inc. estimates.

https://www.bloomberg.com/news/articles/2017-03-10/airbnb-nears-approval-in-room-starved-japan-with-tighter-rules

Konnichiwa CDL

As one of its overseas expansion push, City Developments (CDL) has entered into the land of the rising sun, with the acquisition of a 20 per cent stake in a residential project in one of Tokyo’s poshest areas. The move is in line with CDL’s diversification strategy to accelerate its overseas expansion.

CDL bought the stake from Mitsui Fudosan Residential for a confidential sum. The 163-unit project, Park Court Aoyama The Tower, has a total gross development value of more than 50 billion yen (S$666 million).

Apparently the Japan’s real estate sector, in particular within Tokyo, is experiencing a strong boom in its residential market, with robust demand for well-located condominiums.

The project is in the Aoyama area within Minato ward – the centre of business activity, and home to the offices of many multinational corporations and foreign embassies.Park Court Aoyama The Tower, a 26-storey freehold development, is targeted at high-end domestic and foreign buyers.

Apartment sizes range from 389 sq ft to 3,789 sq ft, and an initial 55 units will be launched for sale. Prices will start from 178.8 million yen for a one-bedroom unit, 199.4 million yen for a two-bedder and 271 million yen for a three-bedroom unit.

CDL’s first partnership with its Japanese partner was in 2011 when it bought a prime site in Ginza for its flagship hotel in Japan. The site was developed into a 329-room hotel that is managed by Mitsui Fudosan Group. Park Court Aoyama The Tower is the second collaboration between CDL and Mitsui Fudosan Group in Japan.

To date, CDL (including Millennium & Copthorne Hotels, and CDL Hospitality Trusts) has poured in more than 50 billion yen in 2 residential developments and 3 hotels in Tokyo.

 

Japan’s real estate revival depends on BOJ

Offices, apartments and hotels are popping up in major cities across Japan as the BOJ’s quantitative easing and negative interest rates push bank lending to real estate developers to an all-time high.

Many developers and analysts expect the construction boom, and its economic benefits, to continue ahead of 2020 Tokyo Olympics – a welcome and very visible sign of success for the BOJ.

Real estate lending began its revival after the BOJ started quantitative easing in early 2013. It gathered pace after the central bank’s shock introduction of negative interest rates in January, which has crushed earnings and sent banks hunting for higher returns.

Domestic bank lending to the real estate sector rose 6.5 percent to 67.7 trillion yen (509 billion pounds) in the first quarter, the highest on record, according to BOJ data. The sector accounted for 14.5 percent of all domestic bank lending, the highest in five-and-a-half years.

Activity in the real estate sector is one bright spot in an otherwise disappointing assessment of Abe’s economic policies, known as “Abenomics.” Tourism-related spending is driving much of the recent activity.

Nationwide, construction of hotels and restaurants, measured by square metres, surged 93.6 percent in June from a year ago, the biggest increase in more than two years, land ministry data show.

The number of tourists visiting Japan is already at a record high after an easing of visa requirements. With Tokyo preparing to welcome visitors for the Olympics and rural areas also attracting more visitors, Japan could face a national shortage of around 41,000 hotel rooms by 2020.

Public works investment, including hotels and infrastructure for tourists, is the centrepiece of the government’s next stimulus package. Other property types are also seeing growth.

Office space in central Tokyo rose 1.7 percent in June from a year ago, the fastest gain since April 2013, data from office broker and research firm Miki Shoji Co show. In another welcome sign, growth has not been restricted to Tokyo alone. In central Nagoya, office space in June rose at the fastest annual pace in almost seven years, even if the market has been more subdued in Osaka.

And although residential housing starts fell in June for the first time in six months, the number of units is still at the highest level in a year, according to land ministry figures.

The economic benefits are considerable. The real estate and construction industries combined accounted for almost 18 percent of gross domestic product in 2014, the most recent year Cabinet Office data are available. The two sectors employ 10 percent of the workforce and have been advertising to hire more workers since late last year. More jobs means more consumption, not to mention the extra spending associated with moving into a new office or apartment.

The rise in activity has also begun feeding into wages. Wages for workers in property and leasing rose 7.3 percent in May from the same period a year ago, the fastest gain in two years, according to labour ministry data.

While wages in the construction sector fell an annual 1.4 percent in the same month, economists say a chronic shortage of construction workers should boost wages soon.

One concern was that Japan’s declining workforce means the replacement of older office buildings with shiny new ones has already exceeded demand.  Yet, last year nationwide land prices rose a mere 0.2 percent, according to the National Tax Agency, while commercial land prices rose 0.9 percent, land ministry data show. Both were the first gains in eight years – hardly the stuff of bubbles.

 

 

Japan to solve the low birth dilemma with immigration

In a recent news article, the current government under Japanese Prime Minister Shinzo Abe seems to be considering policies to increase the intake of foreign workforce into Japan. As Japan is undergoing a long term concern over its demographics and population due to low birth rate. To prevent the country from falling to below 100 million from the current 127 million, immigration is often touted to be the solution in the ageing society. However the relatively closed society of Japan has been well known to be apprehensive towards bringing in more foreigners. However with the current expansion of foreign tourism, some attitudes towards other nationalities may have changed. The lawmakers in the cabinet  said in an interview that the foreign workforce may double. The government may introduce a new visa category for sectors affecting from labour shortages, and expand a foreign trainee policy where workers are allowed entry for a limited period (from 3 years to 5 years). Foreigners currently working in Japan under this scheme ranges within a figure not exceeding 200K. Tech workers from India and Vietnam are among some of the target groups.

Together with the upcoming enthusiasm for the Olympics in 2020, this may be good news for property owners in the country as demand for rental properties may increase. 

Airbnb in Japan

The world’s third most valuable startup is drumming support in the world’s third largest economy in the latest round of debate on regulation. The tourism boom in the country results in shortage in hotel room availability and Airbnb is positioning itself as offering a significant social value proposition in the situation, by supporting tourism and benefit the communities in which they operate by directly benefiting the hosts of the properties. Listing in Japan has balloted to 35K, hosting 1.38m guests. The weakened Yen together with relaxing of visa requirements pushed inbound tourists to a record of 19.7m in 2015 from 8.4m in 2012. The hotel occupancy in Tokyo is tighter than Paris, Hong Kong and New York. It is estimated that the number will hit 35m in 2020.