Abenomics boost for property shrinks back to Tokyo

“Large foreign investors are directing their focus to Tokyo, where rents for office properties are clearly growing,

I leased a new office last year, and was surpised at the price, it was lower than I had expected. What's more, my agent negotiated a much lower rent price than what the building owner had asked. Two other offices I had inquired about refused to negotiate, and now, more than a year later, both of these offices remain vacant. The increase in the published prices seems no more than the rate of inflation over the same period, so it is erroneous to state rents are growing due to increased demand.

I don't think foreigners or anyone else are beating down the doors to buy or lease space in Tokyo, yet new buildings are springing up all over the center of the city.

This result is a no-brainer as the major cities will be the only areas in Japan that will see a slower demographic decline and thus some continuing demand.

I believe those foreign investors are just putting their focus in Tokyo before 2020. Both commercial and residential properties market will become very slow after 2020 once all those investor made enough money out of Tokyo real estate.

Abenomics boost for property shrinks back to Tokyo

Not surprising. Abe can't see further than Tokyo in any case.

Like the boost to the stock markets and like the effect on the exchange rate. Big bang but eventually printing and spending money will not result in lasting economic benefits. Asset price boosts happened but land outside Tokyo will not benefit as fewer people want to live in rural areas (and there are fewer people anyway).

I've spent a decade in Kansai and the overbuilding that has been going on in Osaka of late has been astonishing. As if the new mammoth Osaka Station City weren't enough, with two huge shopping towers, bringing the number of major dept. stores within a minute of the station to four. They followed that up by building the equally enormous Grand Front Osaka, two more massive mixed-use towers dominated by shops peddling more overpriced wares. All in a region that simply has never recovered from the bubble or the earthquake 20 yrs. ago. Add to this the massive Abeno Harukasu in Tennoji.

I live in Kobe and have seen once vibrant developments like Rokko Island, Shin Kobe and Harborland fall into disrepair, plagued by high vacancy rates, many remaining stores selling furniture or used goods, always the most marginal of businesses. Harborland was recently redone on the cheap and is enjoying a bit of a comeback but it won't last. Who's investing in these properties? It's like the little shops that set up near my local station, failing every six months, only after spending tens of thousands of dollars renovating the same failing property. Market research--anyone?

Japan really needs to divest from Tokyo. Given that a quake can happen here at any time, the offices and some aof the manufacturing here needs to be send else where in Japan. Tokyo is a black hole, it sucks up all the young people, and has a low birthrate. If I were Abe, I'd give tax incentives to move offices and factories outside of Kanto, an would move a significant amount of Federal jobs to smaller cities such as Yamagata, Sapporo, Hiroshima, and Gifu.

elkario,

If I were Abe, I'd give tax incentives to move offices and factories outside of Kanto, an would move a significant amount of Federal jobs to smaller cities such as Yamagata, Sapporo, Hiroshima, and Gifu.

If Abe were Elkario, I'm sure this is what he would do. It's very sensible.

Unfortunately he isn't. And moving plum jobs to "inaka" areas would not be well received by his "friends."

He has to support them because it was they who put him there and it is they who keep him there.

For some reason that's beyond my understanding.

Haha thank you Bertie. Yes, unfortunately Abe is indebted to some serious interest groups, including developers. It is too bad, as I said Tokyo's fertility rate is way too low, on top of it basically scalping young people from the rest of Japan. It is a blackhole for talent.

He would get a lot of rural votes9which are weighted very heavily), as well as the smaller city votes. On top of making sure that Japan is more prepared for another Kanto quake. 3/11 was bad for Japan, and Miyagi doesn't have much in the way of factories/banks. Imagine if this happens in Kanto. No way can Kansai keep Japan inc running.

Send the jobs to rural areas, and the rural areas may actually become viable. Give tax credits to new companies and the such, and you could see people not all just piling into Tokyo. That said, my family is looking to exit Kanto. Too bad like 80% of all English teaching jobs are here.

It'll be very interesting to see what happens to land pricing in Gunma and Tochigi Prefectures, especially since both are reachable by Shinkansen and more conventional trains (JR East and Tobu especially). With companies wanting to locate close to Tokyo but don't want to pay the high land prices in Tokyo, Saitama, Kanagawa and Chiba Prefectures, Gunma and Tochigi could become really attractive (Ibaraki too, if it weren't for the issues--rightfully or not--with the Fukushima Daiichi nuclear power plant).

what a strange article... its practically meaningless

Outside Tokyo I see the malaise that has gripped Japan. More old, less young.Empty crumbling houses and empty shops. However, I've never had an inkling to live in the crush that is Tokyo.

elkario,

i agree wholeheartedly with what you write. There are many places around the world where the capital is not the largest city in the nation, Brasilia, Canberra, Washington etc. And it makes total sense to spread the power. As I said, I don't think Abe is capable of this. He lives in the past and cannot think beyond Tokyo.

Shouganai, ne!

There are teaching jobs in Okinawa, the salary might not be as good as Tokyo, but the quality of life is MUCH better!

Two other offices I had inquired about refused to negotiate, and now, more than a year later, both of these offices remain vacant

You actually went to check on those two offices you didn't rent? How do you know they weren't recently vacated?

Bertie, but also in that regard, Tokyo is not only the biggest, but it also has far too much industry there.

I wish I could find something in Okinawa. My wife is a nurse, and jobs there pay pretty much nothing. But same goes with most of rural Japan. Tohoku is pretty easy to live $ wise.