Mizuho, Marubeni to set up fund for exchange student dorms
Companies falling in line behind Japan's goal of boosting foreign students
TOKYO -- Japan's Mizuho Bank is partnering with Marubeni and Tokyo Tatemono to establish by May a fund of around 10 billion yen ($87.7 million) dedicated to building dormitories for exchange students.
While Japan aims to bolster exchange student numbers by 50% from 200,000 to 300,000 by 2020, currently there are not enough dormitories.
The costs will be recovered via rent income and eventual sales of the dormitories. This marks the first time for a Japanese financial institution to invest in dormitory construction, although such investments are customary in Europe and the U.S. The first student residence is expected to be completed as early as fiscal 2018 on the grounds of a national university in Tokyo.
Dormitories will be built in seven to eight different locations on land borrowed from universities. After construction is completed, the fund will outsource operation of the dorms, which are expected to house 300 students each.
The fund is also considering offering residents immigration support, help with moving and opportunities to socialize.
Each tenant will pay tens of thousands of yen for rent, and given that most of the dorms will be at renowned national universities, occupancy rates are expected to be high. Nonpayment risks are low, since the students' parents often pay the rent.
After holding the buildings for five years, the fund will sell them to buyers such as real estate investment trusts. The fund expects it will not be hard to find buyers, as the dormitories offer a stable income source.