Failed share houses start to hit foreclosure market

One of the early foreclosures of failed share houses developed as part of a wide-scale scam goes up for public auction next week. The minimum bid for the building and land is set at 23,672,000 Yen (approx. 205,000 USD), with results to be announced on October 25. Back in January, several share houses by a former Ginza-based share house developer were listed for public foreclosure auction, selling for around a third to less than a half of what the original investors would have paid for them.

Ehime ‘Castle’ up for public auction

Matsuyama Castle 3

A 5-storey ‘castle’ in the outskirts of Matsuyama City, Ehime Prefecture, is up for public auction this month with a minimum bid set at 39,240,000 Yen (approx. 370,000 USD).

The property is a run-down former love hotel designed to resemble a traditional Japanese castle. The 2,600 sqm (27,800 sq.ft) hotel was built in the 1980s, but has been closed since the early 2000s.  It is located on a 15,000 sqm block of land across the road from a pond and golf course, and a few hundred meters from several housing subdivisions.

Nara Dreamland up for public auction for second time

Nara Dreamland 1

Nara City is putting the foreclosed ‘Nara Dreamland’ amusement park up for sale for a second time. The minimum price is again set at 730 million Yen, and bidding is open for 20 minutes on November 10, 2015.

The park was first put up for auction in November 2014 with the same minimum price. No bids were made. Despite the lack of buyer interest last year, the city still believes the site offers a convenient location and are not adjusting the price downwards.

Former Arai Mountain & Spa Resort in Niigata sold at second public auction

Arai Mountain and Spa Ski Resort

A Tokyo-based company established just a month ago with capital of 50,000 Yen was the winning bidder for the former Arai Mountain & Spa Resort in Niigata Prefecture. The overgrown hotel was put up for public auction in early June with a minimum bid set at 884 million Yen. Three companies submitted offers, with “Hotel and Resort Joetsu Myoko” making the highest bid of 1.8 billion Yen (14.6 million USD).

The resort closed down in 2006 and was eventually seized by Myoko City for non-payment of taxes. The property includes 200 hectares of land, and 22 buildings including a hotel and restaurant.

According to the company register, the winning bidder was a company established in Minato-ku, Tokyo, on May 1, 2015. The city will make the final decision regarding the sale on June 26, with the buyer to pay the remaining amount on the same day. Stakeholders have objected to the sale and it is possible that the transaction could be delayed.

Abandoned ski resort in Niigata sold for 1.3 billion Yen

Arai Mountain and Spa Resort Niigata 2The overgrown and abandoned former Arai Mountain & Spa Resort in Niigata Prefecture has been purchased by Tokyo-based A. C Holdings for 1.3 billion Yen. The company, which is involved in construction and golf course development, plans to re-open the ski resort and target wealthy tourists from China and across Asia.

The Arai Resort was developed by Hideo Morita, eldest son of Akio Morita( the co-founder of Sony) and opened in 1993. Over 50 billion Yen was invested in creating a world-class health resort. In its first year, however, the resort ran into management difficulties and Morita’s relatives provided an additional investment of 23 billion Yen to prop up the company. Eventually the over-investment, poor management and low tourist numbers led to the closure of the resort in 2006.

No bidders for Nara Dreamland

Nara Dreamland 2

The foreclosed Nara Dreamland amusement park in Nara City failed to attract a single bid when it was put up for public auction on November 11. The 297,000 sqm site was listed for sale with a minimum price of 730 million Yen (6.3 million USD). Although ten inquiries were received, no bids were made.

Too expensive?

With a minimum price of around 2,400 Yen per square meter, this might seem like an exceptional bargain when compared to the surrounding area, but the park is dotted with a number of overgrown and unsafe structures and rides which would require several hundred million Yen to remove.

The land is also subject to a number of strict building regulations that make redevelopment a difficult task. The land falls in an Urbanisation Control Area and current uses only permit welfare, sports, museum, zoo or school facilities. Approval from the prefectural governor is required before construction.

Housing, commercial, retail or hot spring development is not allowed. It is also within two kilometres of two UNESCO World Heritage Sites (Todai-ji temple and Kofuku-ji temple), which means the land is designated as a scenic and conservation zone under the Act for the Preservation of Ancient Capitals. As a result, building heights are limited to 10 meters, while building-to-land ratios are limited to 30%. Nara’s mayor said the city has no intention to provide any allowances on the construction regulations.