Quick real estate news summary for the week

Investors re-start protests outside troubled bank, residential tenants change their priorities, and Kanazawa hotel projects feel the pain of the pandemic. Below is a quick weekly summary of some of the recent goings-on in the Japanese real estate market.

Whole-building investment scam victims protest outside bank

Investors of whole-building apartment blocks alleging widespread bank fraud returned to protest outside the bank’s head office in Nihonbashi last week, with 50 protestors showing up on the morning of September 2. Two years ago, the bank found itself at the center of a scandal involving a failed share-house investment scheme that saw borrowers’ income statements forged, along with falsified rent return statements. Some progress has been made with those victims, but others allege the same fraud extends to thousands of buyers of whole-buildings. The real estate agencies spruiking these buildings at seminars are alleged to have artificially boosted yields by creating fake rental contracts, even going so far as to install curtains in empty rooms to trick an investor into thinking a building was fully occupied.

Have tenants changed their criteria since corona?

Real estate aggregation site Lifull Homes published a ranking of the most searched for and inquired about train stations by tenants looking for rentals between April and August. After four years in top spot, Ikebukuro dropped to 5th place, while Kawasaki dropped 9 spots to 12th place. Hon-Atsugi in Kanagawa Prefecture climbed 3 spots to be the top-ranked station. The ‘end-of-the-line’ station is a 1hr 15-minute train ride from the Otemachi business district. Other rising stars included Chiba (up 10 spots), Nishikawaguchi (up 14 spots), and Tachikawa (up 23 spots).

Distant suburbs have been popular with tenants who are looking to reduce costs, while telework and fewer days in the office mean they can put up with a longer commute. They don’t want complete suburban living, however, with relatively lively terminal stations offering a direct train to their office the more preferred choice. In terms of inquiries, the station area with the biggest drop in rental property inquiries was Akihabara where inquiries were at 44% of normal levels. Shinjuku saw inquiries drop by half.

Kanazawa’s tourism woes hitting hotel developments

The pandemic-induced pain in the tourism market has put a swift halt to investment in Kanazawa City. A recent government land value report for the second quarter showed land around Kanazawa Station dropping between 3 ~ 6% as of July 1 from the previous quarter. Up until now, most of the city’s growing land prices were the direct result of a hotel development boom, largely led by increasing numbers of foreign tourists. The head of the Ishikawa Prefecture Real Estate Appraisal Association said land acquisitions for hotel projects had already slowed by the end of 2019. With inbound tourism off the table for the time being, developers are taking a more cautious approach. APA Group was scheduled to open a 215-room hotel near the Kanazawa Castle Park in February 2021 but the opening has now been delayed indefinitely.

While the pandemic has hit the accommodation sector hard, there have been no noticeable impacts on Kanazawa’s office vacancy rates or commercial rents at present. CBRE reported vacancy rates in the city at 5.0% in the second quarter of 2020, showing no change from the first quarter. Office tenants in the Hokuriku region are not downsizing or seeking reduced rents.

 1,062 total views,  6 views today