Prices down, yields up in Nakagin Capsule Tower

Prices of ‘capsules’ in the Nakagin Capsule Tower have fallen significantly over the past four years, but rents have remained relatively stable, leading to a boost in rental returns.

In 2008, capsules were priced as high as 6 million Yen each. Now they can be bought for between 2 and 3 million Yen (21,000 ~ 32,000 USD) each. The average monthly maintenance, repair fund and land rent fees (the building is on leasehold land) totals approximately 17,300 Yen for each unit.

Units can rent for between 40,000 to 60,000 Yen/month (430~ 640 USD), and gross yields can range from 20% to 30% per year. Yields are unusually high in this building due to the fact that the property is on leasehold land, and the building will be demolished in the near future, although no date has been decided. Owners of capsules may have to bear some of the costs of reconstruction. Click here to read an earlier article about the demolition plans.

Buyers should also be aware of the following issues:

  • The building has had issues with asbestos
  • Many of the capsules have water leaks
  • The air-conditioning system has broken and no attempts have been made to repair it
  • The round windows on most of the capsules are fixed and cannot be opened (when new, buyers had the option to pay extra for windows that opened)
  • The central hot water system has broken and no hot water can be supplied to the capsules (there is a single shower with hot water in the garbage disposal room)

The model unit that was displayed at the bottom of the building has since been relocated to the Saitama Museum of Modern Art.

Capsules previously listed for sale:

7F (Current as of February 2013)

  • Price: 2,000,000 Yen
  • Size: 10.00 sqm (280,000 Yen/sqm)
  • Estimated rent: 38,000 Yen/month
  • Estimated gross return: 22.8%
  • Monthly condo fees: 15,300 Yen

4F (Current as of February 2013)

  • Price: 2,800,000 Yen
  • Size: 10.00 sqm (280,000 Yen/sqm)
  • Estimated rent: 48,000 Yen/month
  • Estimated gross return: 20.57%
  • Monthly condo fees: 15,300 Yen

10F  (Current as of February 2013)

  • Price: 3,000,000 Yen
  • Size: 10.00 sqm (300,000 Yen/sqm)
  • Estimated rent: 50,000 Yen/month
  • Estimated gross return: 20%
  • Monthly condo fees: 17,300 Yen

Capsules for rent:

7F (Current as of February 2013)

  • Rent: 63,000 Yen/month
  • Size: 10.00 sqm
  • Contract: 1 year
  • Deposit: 1 month
  • Key money: 1 month

10F (Current as of February 2013)

  • Rent: 65,000 Yen/month
  • Size: 10.00 sqm
  • Contract: 2 years
  • Deposit: 0
  • Key money: 0

Building Details:

Location: 8-16-10 Ginza, Chuo-ku, Tokyo
Built: 1972
Construction: 13 stories
No. of capsules: 140
Land ownership: Leasehold
Management Company: Nakagin Integration

Interior images from Noritaka Minami (via http://blog.livedoor.jp/laute33/)

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