Quick real estate news summary for the week

Prices of investment-grade condos on the rise, time-share offices as an alternative to co-working spaces, Okinawa hotels hit with cancellations following State of Emergency declaration, and Suruga Bank sees more share house loan cancellation requests. Below is a quick weekly summary of some of the recent goings-on in the Japanese real estate market.

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With limited rental relief, restauranteurs face bleak outlook

A new rental support payment was rolled out on July 14, allowing small-to-mid-sized businesses and sole proprietors to receive up to 2/3rds of their monthly store or office rent for six months, capping out at 6 million Yen for businesses and 3 million Yen for individuals. As of July 30, 170,000 applications had been made.

The wait has been too long for some restaurants, with customer levels not returning to normal after the state of emergency was lifted on May 25. Many had hoped that diners would return in June, but a second wave of the pandemic starting in July may deal a final blow for many. Late summer and autumn could see a spate of restaurant closures.

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Office vacancies worsen for 5th month

Tokyo’s office vacancy rate worsened for the fifth month in a row in July as the commercial sector feels the pain of the coronavirus pandemic. According to office brokerage Miki Shoji, the office vacancy rate in Tokyo’s five business districts reached 2.77% in July, up 0.80 points from the previous month, and up 1.06 points from last year. This is the highest vacancy rate seen since March 2018 when it was 2.80%, and the highest monthly jump since the company began recording data in 2002.

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Tokyo apartment discounts in July

The median discount on an existing apartment sold in Tokyo’s 23 wards shrunk for the 4th month in a row, with 1.4% seen on transactions in July. This is 0.4 points lower than the median seen in July 2019. Buying activity continued to improve in July, with transaction numbers that may be on par with last year.

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Apparel company sells flagship Ginza building

On July 17, apparel giant Sanyo Shokai announced the sale of their flagship building in Ginza. Temporary store closures during the pandemic have hit the brick-and-mortar retail sector hard, with some cashing out of their real estate holdings to shore up cash reserves. Real estate developers are having a field day as struggling companies reach out to offload long-held and highly-prized assets.

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