Otemachi 2 Chome Development 1

The Japanese government is redeveloping a state-owned site in the Otemachi district near Tokyo Station.

The Urban Renaissance Agency, a semipublic housing company, will build a two office towers which will then be sold to a real estate company or fund once it has been filled with tenants. The sale price is expected to be over 200 billion Yen (1.62 billion USD), which, if achieved, would make it the highest price ever seen for government property.

To date, the most expensive recorded sale of state-owned land was for the former Japan Defense Agency land in Roppongi (now Tokyo Midtown). The land sold to a consortium of real estate developers in 2000 for 180 billion Yen.

This will be the first case of state-owned land being re-developed with the intent to sell. State land is usually sold as land only with development left up to the buyers. However, with the recent redevelopment projects underway in the Otemachi area, it was decided that a higher sale price could be obtained by first building an office tower.

The 2 hectare site is located in Otemachi 2 Chome. It was originally home to the Tokyo International Post Office Building and Communications Museum. Two office towers (32 and 35 storeys) will be built, with the government owning floors 5 ~ 31 of the 32-storey tower. NTT Group and Japan Post Holdings will retain ownership of the second 35-storey tower. The total floor area of the two towers will be 350,000 sqm. Completion is expected in 2018.

Given the anticipated high sale price of the new building, the government is also considering selling off floors separately.

Otemachi 2 Chome Development 2

The Nikkei Shimbun, June 13, 2015.
Tokyo Metropolitan Government News Release, August 29, 2013.