TOKYO -- Japan's leading property developer, Tokyu Land, is accelerating its district-focused urban renewals. While its rivals Mitsui Fudosan and Mitsubishi Estate are expanding development of commercial facilities both in central Tokyo and in suburban areas, Tokyu Land has set its focus on central districts in Tokyo, with the aim to build a stable revenue base through the development plan.
One of its large development plans underway is a 40 billion yen ($382 million) project to build a commercial complex in the area between Harajuku and Omotesando stations. This is part of the effort to increase attractions in the Greater Shibuya district, including the areas around these two train stations, to draw more foreign tourists, as well as young locals in their 20s to 30s.
The complex will be a 10-story building on a 3,000-sq.-meter land lot that faces two major roads, with a total floor area of more than 20,000 sq. meters. Tokyu Land owns Co-op Olympia Annex, an old commercial and residential building, which stands in the center of the project's location. Tokyu Land and other property owners will dismantle existing buildings on the location before they start construction in fiscal 2018. The new complex is expected to open by 2020, the year the Tokyo Olympic and Paralympic Games will be held.
Tenants in the facility will include restaurants, clothing stores and interior goods shops. Tokyu Land recently launched Tokyu Plaza Omotesando Harajuku and Q Plaza Harajuku, both commercial facilities in the vicinity of the planned commercial complex. The company aims to promote good access and connections between these facilities so that visitors can explore the whole area easily.
Cash-rich property developers are eager to expand investment on urban renewal development. Mitsui Fudosan and Mitsubishi Estate have made the most of their strength in commercial development for building shopping facilities in central Tokyo and large shopping outlets in suburban areas outside of Tokyo.
On the other hand, the total revenue of Tokyu Land and its group companies from the commercial property business is 36.6 billion yen, roughly 20% of that of Mitsui Fudosan. As part of its effort to catch up with its rivals, Tokyu Land has laid out a plan to invest 200 billion yen on urban renewal projects in central Tokyo during the three years from fiscal 2014 to 2016 ending March 2017.
The company is preparing to open the Tokyu Plaza Ginza shopping building in March, just a few blocks away from what is known as Ginza crossing, the main intersection in the ritzy district. Its tenants include an airport-style duty-free shop. This is one of the few spots in Japan outside of airports where foreign tourists can buy items such as alcohol and tobacco that are exempt from customs duties in addition to their not being subject to the the consumption tax.
Tokyu Land is a unit of Japanese conglomerate Tokyu group, which is based on the public transportation business. In 2011, Tokyu Land and its group company, Tokyu Corp., a major private railway operator in the Greater Tokyo area, jointly developed Futako Tamagawa Rise, a shopping complex attached to the Futako Tamagawa train station in an affluent residential district just south of central Tokyo.
Shibuya-based Tokyu group has been dominant in the area, but other businesses are also trying to capture opportunities there -- one of the busiest and liveliest areas in the world. Shibuya Ward has appointed Mitsui Fudosan to jointly establish a commercial and accommodation complex in the ward. NTT Urban Development has bought a high-rise apartment building near Harajuku Station and is considering redevelopment of the location.
Tokyu Land, on the other hand, aims to promote comprehensive development of the Greater Shibuya district, effectively connecting spots in the area. The company believes this will enhance the charm of the area and eventually give the business a greater presence there.