Old apartment building to be replaced with office

Nomura Real Estate Holdings is acquiring an entire condominium building in Takanawa from its apartment owners association. The 42-year-old apartment building will be demolished and replaced with an office building.

The acquisition was done under the Act on Facilitation of Reconstruction of Condominiums. There are typically two ways that condo-style apartment buildings are redeveloped – either (1) the owners association votes to demolish it and replace it with a new apartment building with all or some of the original apartment owners receiving apartments in the new building and with or without the help of a developer, or (2) the apartment owners association votes to sell the building and land to a developer after which point it may be demolished and replaced with anything, even a parking lot.

Takanawa Koyo Heights was built in 1980 with 106 apartments over 12 floors. Many of the units are around 30 ~ 40 sqm (323 ~ 430 sq.ft). An earthquake resistance inspection in 2013 found that it did not meet current resistance standards. It was also suffering from aging and deteriorating plumbing. The apartment owners association began discussing redevelopment options in 2016, eventually voting in favor of selling off the building and land in its entirety.

Nomura was chosen as the buyer. The developer decided that the most suitable replacement for the site was an office building due to its proximity to the redevelopments underway around nearby Takanawa Gateway and Shinagawa Stations. The new office building, tentatively named PMO Takanawa, will have 10 floors and a total floor size of around 5,600 sqm (60,256 sq.ft). Demolition of the former apartment building began this month and completion of the new office building is scheduled for 2024.

Japan has 1.03 million apartments in buildings built to the old earthquake codes (before May 31, 1981). However, there have only been 270 redevelopment cases to date (as of April 1, 2022) according to the Ministry of Land, Infrastructure, Transport, and Tourism. The number of buildings over 40 years old is expected to climb rapidly in the coming years, which is why the government is encouraging redevelopment through zoning allowances and reducing voting ratios.

Source: Nomura Real Estate Holdings News Release, August 16, 2022. 

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