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May 19, 2014 Department stores in the central Tokyo relying more on tourists from abroad: Nikkei

The consumption tax went up in April from 5% to 8%. Retail businesses are terrified of lower sales. Grocery shops list two prices, with and without tax, to show that they have not raised their prices. Department stores in the central Tokyo, however, are doing well, thanks to tax-exempt sales to tourists from overseas, Nikkei reported. In 2013, the government broadened the tax exempt products to include cosmetics and food, in its effort to lure more inbound tourists.

Separately, Japan’s top business daily also reported that Fosun Group of China had acquired IDERA Capital Mangement, managing mostly office buildings in the Greater Tokyo region. The acquisition manifests the interests of one of the leading investment companies in China in the Japanese real estate market; and perhaps the comparative attraction of the market.

May 19, 2014 March construction Y4.55 trillion, up 10.9% YoY: MLIT

Total constructions in March of 2014 reached Y4,551.9 billion, up 10.9% from March of 2013, the Ministry of Land, Infrastructure, Transport and Tourism announced May 16.
Private constructions totaled Y2,427.2bn, up 8.4% YoY, while public sector constructions were Y2,124.6bn, up 13.8% YoY. Of the private constructions, residential properties accounted for Y1,265.3bn, up 9.5%, and non-residential assets Y651.2bn, up 10.1%.
Regionally, constructions in Hokkaido (North) totaled Y200.9bn, up 2.2% YoY; Tohoku (Northeast) Y638.2bn, up 21.0%; Kanto (Greater Tokyo+) Y1,485.2bn, up 5.3%; Hokuriku (Mid north) Y279.9bn, up 21.4%; Chubu (Mid south) Y507.7bn, up 11.4%; Kinki (Greater Osaka+) Y567.9bn, up 10.1%; Chugoku (West, north) Y248.5bn, up 17.7%; Shikoku (West, south) Y135.4bn, up 21.8%; Kyushu and Okinawa (South) Y488.1bn, up 9.1%.

May 16, 2014 Vacancy rate in large central Tokyo offices dips below 5%: Sanko Estate

The vacancy rate in large offices in the central Tokyo declined by 0.41 percentage point from 5.38% in March to 4.97% in April, falling below the 5% benchmark for the first time since June of 2009, Sanko Estate reported in its office market report for May of 2014. The central Tokyo in this instance consists of five wards, Chiyoda, Chuo, Minato, Shinjuku and Shibuya. And large rental office buildings are those with standard lease area of 200 tsubo or more per floor, roughly equivalent to 660 square meters. One tsubo is about 3.3 sq. m.
The vacancy totaled 250,702 tsubo, or about 827,317 sq. m., in April. The total floor area available for lease was 585,719 tsubo.
Asking rent level was Y18,265 per tsubo, in April, up from Y18,172 per tsubo in March.
Shinjuku ward in particular was showing marked improvements.

As of the end of April, for large office buildings, the vacancy rates were 5.3% in the Tokyo 23 wards, 6.8% in Sapporo, 9.8% in Sendai, 6.8% in Nagoya, 8.1% in Osaka, and 6.1% in Fukuoka, while the asking rent levels were Y38,167 per tsubo in Marunouchi, Tokyo, Y11,432 in Ekimaedori, Sapporo, Y12,676 in EkimaeHoncho, Sendai, Y15,728 in Meieki, Nagoya, Y20,517 in Umeda, Osaka, and Y15,617 in Tenjin, Fukuoka. .

May 15, 2014 In the Greater Tokyo, the trade volume of pre-owned residential assets declined in April, but the apartment price went up: REINS

One of four organizations that manage Real Estate Information Network System, REINS for registered member real estate agents, that covers the eastern Japan, published its monthly market report for April of 2014, on May 14. The figures for the REINS website are for the Greater Tokyo area, for April of 2014, unless otherwise noted.
-Trades of pre-owned apartments declined by 10.7% YoY to 2,785 units, at Y424,000/sq. m., up 7.7%; average sale price was Y26.88mn, up 5.2%; floor space of 63.41 sq. m.; 19.5 years old. As exceptions to the overall trend, the unit price declined in Chiba, and the volume rose in Kanagawa.
-Trades of pre-owned houses declined by 13.4% YoY to 927 houses, at the average price of Y29.22mn, down 2.6%; average land area was 142.26 sq. m.; floor area of 106.32 sq. m.; 20.18 years old . As exceptions, prices rose in Yokohama, Kawasaki and Tama.
-New registrations for sale of pre-owned apartment declined by 2.2%, down for 17 consecutive months, to 13,408 units. Inventory declined by 14.9%, down for 15 consecutive months, to 33,909 units. New registrations for sale of pre-owned houses rose for two consecutive months by 1.3%, to 5,636 houses, while the inventory declined for 15 consecutive months by 8.0%, to 18,749 houses.
-In Sapporo, the trade volume of pre-owned apartment declined by 7.0% YoY 199 units, while the unit sale price rose by 11.3% to Y183,000/sq. m. For Sendai, the corresponding numbers were down 1.1% to 90 units and up 4.6% to Y157,000/sq. m. As for pre-owned houses, in Sapporo, the volume rose by two consecutive months by 22.7% to 108 houses, with the average price also rising for two consecutive months by 2.5% to Y15.86mn. In Sendai, the volume declined by 5.9%, the first YoY decline in the year, by 5.9% to 32 houses, while the average sale price rose for 17 consecutive months buy 16.5% to Y25.58mn.

May 15, 2014 Land prices in Tokyo 23 wards rising: Sumitomo Mitsui Trust Research Institute

In the second half of 2013, from July to Dec., the trade price of residential land rose by 3.5% year-on-year, while the price of commercial land rose by 9.2% in the 23 wards of Tokyo, according to Sumitomo Mitsui Trust Research Institute. The study covered residential and commercial land in Tokyo 23 wards, traded at price of Y10mn or more, with area of 30 sq. m. or more, and within 30 min. from the closest train stations; the sample size was 15,847 residential plots and 2,343 commercial plots.
Change in trade price was estimated from the change in public appraisal values times the divergence, which was measured from gaps of trade prices from max. and min. of public appraisal values in the area.

May 14, 2014 Come to Asahi Housing Fair on May 30 Fri, 31 Sat, June 1 Sun. at Tokyo Big Sight

Asahi Housing Fair 2014 will be held at the Tokyo Big Sight, West Hall 1-2 (from Kokusai Tenjijo station on Rinkai line from Shinkiba or Osaki stations, or Kokusai Tenjijo Seimon station on Yurikamome line from Toyosu or Shimbashi stations) on May 30 Friday, May 31 Saturday, and June 1 Sunday, from 10:00 to 17:00. Auction Pavilion will consist of FKR and auction concierges, i.e. real estate agents with expertise in court auctions, from Tokyo, Osaka and Kagoshima. So come and see us, if you can.
(With pre-registration on the website the entrance charge of Y2000 becomes free)

May 14, 2014 FY14Q1 Overview by MLIT

On Monday, May 12, 2014, the Ministry of Land, Infrastructure, Transport and Tourism published its monthly report for April.

-Orders for public works in February rose for 13 consecutive months:
Construction orders of more than Y5mn from public institutions declined 0.1% year-on-year in the first quarter of 2013, from Jan. to March; rose 44.7% YoY in the 2nd, April to June; rose 25.8% in Q3; rose 9.2% in Q4; then rose 11.2% in Jan. 2014, and rose 3.5% in Feb. 2014.
-Housing starts in March declined for the first time in 19 months:
New housing construction starts totaled 69,411 units in March, down 2.9% YoY; seasonally adjusted annual figures came to FY13Q1 908,000 units, FY13Q2 978,000, FY13Q3 999,000, FY13Q4 1,026,000, Jan 2014, 987,000, Feb 2014 919,000, March 2014 895,000.
-Private-sector non-residential construction starts declined in March for two consecutive months:
Non-residential construction starts in the private sector measured in floor areas rose 17.5% YoY in FY13Q1; rose 16.2% in FY13Q2; rose 9.3% in FY13Q3; rose 5.0% in FY13Q4; then rose 13.0% in Jan. 2014, declined 8.6% in Feb. 2014, and declined 8.0% in March 2014.
-Domestic and cross-border freight continued to increase across the board; trucks, trains, air and ocean transport; human traffic also increased both domestic and international; outbound tourists declined for three consecutive months, while inbound tourists continued to increase; tourism transaction amount also rose; source MLIT.

May 14, 2014 Office rent may be on the rise

Marunouchi is the primary business district just west of the Tokyo station, along with neighboring districts of Otemachi. While the Mitsui group is traditionally strong in Nihonbashi area, Mitsubishi is strong in Marunouchi. Mitsubishi Estate plans to raise the office rent in Marunouchi by about 10 to 20%. The move may have some repercussions in the rest of office districts.
For fee, you may obtain quality information at these sites; Nikkei Real Estate Market Report, Fudousan Keizai Weekly by Real Estate Institute Co.

May 13, 2014 Legalized gambling in Japan

A group of legislators promoting inbound tourism has been working to legalize gambling in Japan; except the word "gambling" does not fit the bill so well, so they call it "integrated resort." In a dire attempt to spur economic growth, some local governments welcome the idea, putting the ethical concerns aside. Property prices in Osaka make it more preferrable over Tokyo in this respect. Astute investors may look for properties in other locations as well; such as Sasebo and Otaru, as Reuters reports these cities are also eager.
For more please see these sites; Reuter, More on gambling by Reuter, CalvinAyre.com, CNBC.

May 12, 2014 Appeal denied in the North Korea building auction

Tokyo High Court denied the appeal by the General Association of Korean Resident aka Chongryon, so the compulsory sale of the property to Marunaka Holdings in Takamatsu will proceed; the winning bid was Y2.21 billion while the minimum bid was about Y2.134 billion. The sale may serve as an example of worst case scenario to study.

A note on the court system in Japan:
There are 50 district courts; one in each of 47 prefecture, except Hokkaido has four. And there are branches. Family courts that also handle juvenile cases are generally one for each district court; also with branches. There are 438 small claims courts. High courts that generally handle appeals are eight in number, with branches; Sapporo, Sendai, Tokyo, Nagoya, Osaka, Takamatsu, Hiroshima, Fukuoka. High court that specializes in intellectual properties is a branch of Tokyo High Court. And there is one Supreme Court, in Tokyo; only major cases are handled with the big court with all 15 justices, others are by one of three small courts with four or five justices. Outside of the court system, there are government bodies, which arguably function similarly in special situations, such in anti-trust and election; the constitution prohibits a special court.

May 12, 2014 Inviting entrepreneurs from overseas

The government is considering a plan to invite more workers from overseas in six strategic districts nationwhide, setting up a new immigration category. Domestic workers will also be easier to work and stay in these districts, according to the plan. It is to promote economic rejuvenations through more entreprenuers and also to assist working women. The government hopes to increase the investment from abroad. (Source: Nihon Keizai Shimbun May 12, 2014) Nikkei Asian Review

Previously the government has also announced a longer visa term for construction workers.

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