Blocks of commercial land on the man-made Kobe Airport Island are not selling as well as expected. In 2011, not a single parcel of land was sold.

Construction of the island was financed through the issuance of municipal bonds, and the city planned to repay the bonds by selling off blocks of land to various enterprises.

Including the leased parcels of land, transactions have been made on only 8% of the island. The lackluster sales have been attributed to the continuing poor economic situation and the effects of the Tohoku disaster which led many companies to move their facilities away from low-lying coastal areas.

Kobe Airport was opened six years ago. The cost of developing the 272 hectare island totaled 200 billion Yen. In order to repay the bonds, the city needs to sell 82.8 hectares of land. Currently there are only seven companies located on the island, including a rent-a-car company and a wedding hall. These seven companies are only occupying 6.5 hectares of land.

In 2007, land was advertised for 270,000 Yen/sqm, but has since been halved in price. The city is also considering loosening the restrictions on land use in order to attract buyers.

Yokohama and Fukuoka are also having similar problems selling land on their reclaimed islands.

Source: The Kobe Shimbun, February 9, 2012.

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