Abandoned ski resort in Niigata sold for 1.3 billion Yen

Arai Mountain and Spa Resort Niigata 2The overgrown and abandoned former Arai Mountain & Spa Resort in Niigata Prefecture has been purchased by Tokyo-based A. C Holdings for 1.3 billion Yen. The company, which is involved in construction and golf course development, plans to re-open the ski resort and target wealthy tourists from China and across Asia.

The Arai Resort was developed by Hideo Morita, eldest son of Akio Morita( the co-founder of Sony) and opened in 1993. Over 50 billion Yen was invested in creating a world-class health resort. In its first year, however, the resort ran into management difficulties and Morita’s relatives provided an additional investment of 23 billion Yen to prop up the company. Eventually the over-investment, poor management and low tourist numbers led to the closure of the resort in 2006.Read more

by Zoe Ward

Office vacancy rates in Tokyo down for 18th consecutive month

According to Miki Shoji’s office report, the office vacancy rate in Tokyo’s five central business districts (Chiyoda, Chuo, Minato, Shinjuku and Shibuya) was 5.47% in December 2014, down 0.08 points from the previous month and down 1.87 points from last year. This is the 18th month in a row to see a month-on-month decrease in vacancy rates.

In Minato-ku, vacancy rates dropped to the 5% range for the first time since January 2009.

The vacancy rate in brand new office buildings was 13.40%, down 0.33 points from the previous month and down 1.10 points from last year. Only one office building was completed in December and was fully leased at the time of completion.Read more

by Zoe Ward

Denenchofu to lose landmark historic home

Suzuki Residence Denenchofu 1

On December 17, 2014, the historic Suzuki Residence in Denenchofu 3 Chome was opened up to the public for a farewell tour before demolition.

At the open day, the current owner, who is the grandchild of Mr. Suzuki, spoke about their fond memories of the home. Over the years it had hosted family birthday parties, weddings and funerals, and has been the setting for several TV dramas. The 90-year old house, which has been registered as a Tangible Cultural Property, has been painstakingly cared for and is in beautiful condition.

The Suzuki Residence was built during the Taisho era for a German resident. It was later purchased by Mr. Suzuki for his son, who later returned from the war to to live in the house with his family. The architect is unknown, although some have suggested it might have been Kintaro Yabe, the designer of the Denenchofu Station Building, since the buildings are similar in style.

It is a 2-storey western-style home with a total floor area of 165 sqm. It sits on a large 928 sqm block of land which fronts onto Denenchofu’s gingko tree-lined main street.

The decision to demolish the home was not an easy choice by the owner. However, selling the property would prove to be difficult given the size of the land and the limited buyers in that price range. Average land prices in the Denenchofu 3 Chome area are currently around 1 million Yen/sqm, which would give the property a market price of around 930 million Yen*.

*Update: In April 2015, the new owner of the property (a developer) listed the land for sale for 1.12 billion Yen, or approximately 1,200,000 Yen/sqm. Under the terms of sale, the buyer is required to use the home builder designated by the seller and sign a construction contract within 3 months of purchase.  

High inheritance taxes are another issue.Read more

by Zoe Ward

Demand from local and foreign buyers continues to push prices higher

Recently, both new and secondhand apartments have seen a steep rise in prices, yet rental prices have remained relatively flat. As a result, yields have been falling with the typical gross yield across greater Tokyo dropping to the 4 ~ 5% range.

The increase in demand from wealthy Japanese looking to reduce their inheritance tax burden as well as renewed interest from foreign investors is thought to be the main driver behind the jump in prices.

Domestic investors looking to reduce inheritance taxes

High-rise apartments have been in high demand as their inheritance tax value is a fraction of their actual market value, offering a potentially large decrease in the tax burden for heirs. While there might be a 20 ~ 30% difference in the market price of an apartment on a high floor versus a low floor, both apartments (assuming they are the same size) are given the same value by the tax office. Buying an apartment on a higher floor, therefore, could provide a bigger deduction than one on a low floor. Compared to cash and other financial assets which are taxed based on their face value, the value of a high-rise apartment for tax purposes might be reduced by as much as 80% from its market value*. Wealthy Japanese have been actively buying up high-rise apartments, including those that might seem comparatively expensive.Read more

by Zoe Ward

Residential yields in Minato-ku - January 2015

Minato Tokyo Yields Jan 2015

According to real estate listing site Homes, the average gross yield on an apartment in Minato-ku in January was 5.3%, down 0.6 points from the previous month and down 0.5 points from last year. The average gross yield across Tokyo was 6.8%, showing no change from the previous month but down 0.7 points from last year.

The average asking price of a second-hand apartment in Minato-ku was 843,128 Yen/sqm as of January 1, up 1.2% from the previous month and up 14.1% from last year. The average asking price for land was 1,262,424 Yen/sqm, up 0.3% from the previous month and up 50.5% from last year.(*Note: January 2014 saw a temporary dip in land prices. Since the prices are based on listings on the Homes site, it is possible that some comparatively cheap land was listed which may have pulled the average down for that month.)Read more

by Zoe Ward

Home loan interest rates to reach record low in January

Mizuho Bank Interest Rate

Three of Japan’s major banks are lowering the prime interest rates on their 10-year fixed rate homes loans in January.

The Bank of Tokyo-Mitsubishi UFJ and Mizuho Bank will lower interest rates by 0.1 points to 1.15%, while Sumitomo Mitsui Trust Bank will reduce their rate by 0.1 points to 0.9%. It is expected that other banks will also lower their rates.

Large-scale monetary easing by the Bank of Japan has caused the long-term interest rate to reach a record low.Read more

by Zoe Ward

Tokyo apartment sales in December 2014

 

December 2014 Sales

The following is a selection of apartments that were sold in central Tokyo during the month of December 2014:Read more

by Zoe Ward