Norges Bank Real Estate Management (NBREM), part of Norway’s sovereign wealth fund, will acquire a 70% stake in a 132.5 billion Yen (approx. 1.17 billion USD) portfolio of real estate in Tokyo along with partner Tokyu Land. This is NBREM’s first investment in Asia.
Takeda Pharmaceutical has sold two of their buildings in downtown Tokyo to the Takashimaya Department Store for a reported price of 49.5 billion Yen (approx. 442 million USD). Delivery of the buildings is scheduled for March 2019. Both properties were owned by Takeda’s real estate division. Takeda will be putting the proceeds from the sale towards their research for new cancer treatments.
The Tokyo Takeda Building and adjoining Takeda Shin Edobashi Building are located a block behind Takashimaya’s Nihonbashi store. The block to the north and east of the historic department store is currently being redeveloped into two high-rise office towers ranging from 140 ~ 176 meters tall and with completion expected in early 2018 and early 2019.
On November 17, Google Japan announced plans to relocate their head office to a new office tower near Shibuya Station in mid-2019.
Google will be taking up floors 14 to 35 in Shibuya Stream – a 35-storey office tower due for completion in late 2018. The 50,000 sqm (538,000 sq ft) of office space will allow them to double their staff numbers from the current level of 1,300. The lower floors of the Shibuya Stream building will be hotel rooms, making Google the sole office tenant.
Shopkeepers alongside the Nakamise shopping street, a 250 meters long souvenir shop-lined pedestrian mall leading to Sensoji temple in Tokyo, are reeling after being hit with a potential 16-fold increase in store rents. In September, Sensoji temple informed the tenants of plans to increase the rent from the current level of 15,000 Yen per month for a 10 square meter shop to a new rent of 250,000 Yen per month, making it in line with market rents for the neighborhood and ending years of subsidized rents that had been offered by the previous landlord – the Tokyo metropolitan government.
According to Miki Shoji, the average monthly office rent in central Tokyo’s five business districts reached 18,995 Yen per Tsubo (approx. 5,747 Yen/sqm) in September, an increase of 3.59% from last year and the 45th month in a row to record a year-on-year increase. The average is still 17% below the recent record high of 22,901 Yen/Tsubo (6,929 Yen/sqm) seen in August 2008.
Articles appearing in both the Nikkei Business Publication and the Business Journal have suggested that a block of land (with building) alongside Ginza’s main shopping street will be sold for a record price of up to 64 million Yen per square meter (approx. 570,000 USD/sqm or 53,000 USD/sq ft).
Takashimaya has acquired the remaining 60% of the land under the Times Square Building near Shinjuku Station for 21 billion Yen (approx. 185 million USD).
The property is located on the eastern side of Shinjuku Station in Shibuya ward. The main tenants of the building include the Takashimaya department store and Tokyu Hands.
On September 21st, the Kanto Local Finance Bureau announced that Tokyu Land had won the competitive bidding process for the redevelopment of the Kudan Kaikan building in central Tokyo. The bidding price will be announced after Tokyu signs the contractural agreement in March 2018.
The developer will lease the 8,700 sqm block of land under a 70-year fixed-term and will build a high-rise office tower on the site. The north-eastern corner of the original Kudan Kaikan building will be preserved and retrofitted using a base-isolation system (menshin-kozo).
According to the Japan Real Estate Institute, 1.35 million square meters (approx. 14.5 million sq ft) of new office space was supplied across the country in 2016, down 25% from 2016 and the lowest level seen since 1980. 84% of the new supply was centered in Tokyo’s 23 wards.
Sapporo, Sendai, Saitama, Kyoto and Kobe saw no new office buildings supplied last year, although there are several new buildings planned for completion over the next two years. Kyoto City, however, has no new office supply planned for the near future. Kyoto is reportedly suffering from a severe shortage of office space with office brokerage Miki Shoji reporting a current office vacancy rate around 2%, down from 12% seen in 2010.
On September 4, Mitsui Fudosan announced that the official name of the large-scale redevelopment opposite Hibiya Park in downtown Tokyo will be Tokyo Midtown Hibiya. The 191m tall building will include office space, the 2,300 seat TOHO Cinemas Hibiya, and 60 stores and restaurants.
The grand opening is scheduled for March 29, 2018.