Why an Olympic delay could spell disaster for Athletes Village buyers

The discussion of delaying or even canceling the 2020 Tokyo Olympics has become a hot topic in recent weeks and has led to some questions about what will happen to the buyers of the 4,145 apartments in Harumi Flag – the condos that will be refurbished from the Athletes Village.

Last week, Haruyuki Takahashi, a member of the Tokyo organizing committee, caused a stir after suggesting that the 2020 Tokyo Olympics could be delayed for one or two years. He later apologized for his comments. Any delay to the games would result in a corresponding delay to the handover of apartments in the Harumi Flag development.

At worst, a two-year delay would see buyers receive their apartments in 2025. 

If the novel coronavirus does result in a delay to the games, a late handover of the apartments could potentially be considered force majeure. This could mean that the late penalty clauses in the sale contracts won’t kick in. Buyers who change their minds and want to back out of their purchase, meanwhile, could face losing their deposit. Those who want to stick around would face additional hassles with schooling and moving schedules.

A complete cancellation of the Tokyo Olympics could prove even more disastrous for buyers as any excitement over the project’s Olympic legacy would vanish, leaving little appeal for the manmade islands. While the apartments are, on average, larger than normal, the nearest train station is over a 20-minute walk away. In a city where residents are increasingly placing preference on proximity to train stations, anything over a 7 to 10-minute walk from the nearest train station can be an especially hard sell. So far, the Olympic hype has outweighed the drawbacks to the inconvenient location, with 893 of the 940 apartments released for sale already under contract.

Sources:
TBS News, March 16, 2020.
M&A Online, March 17, 2020.
Sanspo, March 14, 2020.

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