The Real Estate Companies Association of Japan

PUBLICATION

REAL ESTATE in Japan

INTERNATIONALIZATION

  • Entering Giant Overseas Markets

The dawn of Japan’s real estate internationalization was the 1970s, when some major real estate companies began to go overseas. The strong yen in the 80s boosted companies’ overseas expansion and the favorable domestic economy helped numerous major real estate companies acquire and manage real estate overseas in earnest.

Although the bubble burst suspended this momentum, since 2010 major real estate companies have once again been developing business overseas. Using development and management expertise cultivated over many years to export problem-solving city models takes the high growth rates in Asian and other countries and links it to Japanese company growth. Based on this trend, in April 2015, the Ministry of Land, Infrastructure, Transport and Tourism created a new International Affairs Division in the Land Economy and Construction and Engineering Industry Bureau to support the overseas development of real estate and construction companies.

  • From Western Cities to Asian Countries

Overseas business in real estate was mainly office building acquisitions in the major cities of advanced Western countries. These cities could expect global demand and had legal frameworks for real estate and rules for international transactions, and disclosed plenty of data on real estate.

From 2010, in addition to mature global cities, investment began to flow to new destinations such as China, where the mainly-urban real estate market was rapidly swelling due to its massive population, and Southeast Asian countries seeing population increase and economic growth.

These emerging countries were not easy destinations due to “country risk” stemming from the immaturity of their real estate markets, uncertain political and legal systems and scarce disclosure of market information. However, rapid urbanization and economic growth caused office and housing demand to swell, and with progress in legal system development and information disclosure, an increasing number of real estate companies are making the move.

In addition to developing individual office and apartment buildings in these countries, more real estate companies are using urban development expertise cultivated in Japan to build large-scale mixed-use developments together with local developers. Even in the West, recent years have seen companies not merely investing but building offices as well.

  • Inbound Efforts

Inbound business initiatives to encourage not only direct investment in domestic real estate by foreign investors and companies but also the entry of foreign companies and increases in tourist numbers are gaining steam. As business globalizes, 2013 saw the creation of National Strategic Special Zones where a diverse menu regulatory reform seeks to provide the world’s most business-friendly environment.

Public and private efforts to make Japan a more tourism-based country by attracting more foreign tourists are also bearing fruit. These numbers are showing steady growth and the country has set a target of 40 million in 2020, the year of the Tokyo Olympic and Paralympic Games. Development of hotels and various private accommodations to handle them is underway.

Recent years have seen a focus on attracting not only tourists but “MICE”, big business events such as meetings, training, academic conferences, and exhibitions likely to have greater numbers and interaction as well as an economic ripple effect. Large-scale convention facilities that can handle international conferences are being developed and companies are working with municipalities with tourist spots to draw visitors.

Related section : Office Building (Urban Redevelopment)
          : Resorts/Hotels

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