June 5, 2014 11:36 pm JST

Mori Building ready to seize Tokyo's 'last chance' for greatness

DAISUKE ITO, Nikkei staff writer

TOKYO -- As Japan's capital gears up for the 2020 Summer Olympics, Mori Building will kick its redevelopment plans into overdrive. At the center of this whirl of activity lies the Toranomon district, the property developer's birthplace.

      Mori Building's towering new multi-use complex, Toranomon Hills, opens next Wednesday.

     Its name echoes that of Roppongi Hills, the company's crown jewel and the brainchild of the late Minoru Mori, who turned his family business into a real estate empire and dreamed of making Tokyo the greatest city in the world.

     Tokyo's choice as a two-time Olympic host city and its selection by the government as a strategic economic zone represent "the best and last chance" to achieve Mori's vision, President Shingo Tsuji told reporters Wednesday, when work on Toranomon Hills ended.

     The project, including the extension of a loop road, cost some 230 billion yen ($2.23 billion). The complex's 52-story skyscraper stands atop the new thoroughfare -- nicknamed the MacArthur Road because plans for it go back to the days of the American occupation.

     Floors 6-35 offer spacious office accommodations that have proved popular with foreign companies. Nearly all of the space has already been taken. Tenants on the higher floors will include Japan's first Andaz, a chain of boutique hotels run by Hyatt.

     Mori Building has plans to redevelop two adjacent sites and pursue 1 trillion yen worth of other urban renewal projects in the Toranomon and Roppongi areas over the next decade.

     Ease of access is one of Toranomon Hills' selling points. When the loop road connects to the Tokyo Bay area in fiscal 2016, Haneda Airport will be only a 20-minute drive away from the complex.

     Tsuji became president of Mori Building in 2011, the first to come from outside the founding family. With a flair for deal-making, he takes after Mori, who died two years ago. But carrying on his predecessor's pursuit of greatness for Tokyo will present challenges, not the least of which is financial.

     The company's interest-bearing liabilities stood at nearly 1 trillion yen at the end of March. Mori Building takes in only a fifth the sales of listed developer Mitsui Fudosan but has half as much debt. Its earnings may be solid enough now, but all this debt will weigh it down.

     Mori Building won't go public just to raise funds, nor does it have to do everything on its own, Tsuji insists. Plans for what has been dubbed the second Roppongi Hills seem to be falling behind. Mori Building has decided to work with Sumitomo Realty & Development on the project, but some fear the end result will lack the Mori touch.

     Tokyo has work to do, too. It ranked fourth in the Mori Memorial Foundation's latest Global Power City Index, trailing London, New York and Paris. Singapore trailed close behind in fifth place in the competitiveness ranking.