TOKYO -- Booming tourism from abroad and a rush of urban redevelopment projects have lifted commercial land prices in Japan's major cities, a phenomenon now hitting regional travel hot spots as well.
Tokyo's central Ginza district was still home to Japan's most valuable commercial land as of Jan. 1. But commercial property in Osaka's Shinsaibashi shopping district, which draws massive spending by foreign tourists, gained the most value from a year earlier as prices rose 45.1%. Tax-exempt sales at the flagship Daimaru department store there for the year ended in February more than doubled from fiscal 2014. Laox opened one of its largest tax-free locations in the area last month, part of a flood of property investment targeting shoppers from abroad.
Osaka is home to six of the 10 surveyed locations nationwide with the largest gains in commercial land prices. Growing tourism has exacerbated the city's lodging shortage, spurring intense property battles. "As competition with condominium developers heats up, some hoteliers have laid down bids 50-100% greater than their competitors," an appraiser there said.
Tourist hot spots outside major metropolises are feeling the heat as well. Hokkaido's Kutchan, home to the famed Niseko mountain resort, saw 19.7% growth in residential land prices, the highest rate in the country. A number of foreign-affiliated hotels are going up in the area.
Prices of commercial land rose 15.4% in busy areas of Oita Prefecture's Yufuin hot springs resort, where the number of foreign visitors has doubled in the past five years. The area is small, with few properties on sale, reportedly putting commercial rents on par with those in the center of prefectural capital Oita.
Massive urban redevelopment projects also are sending land values skyward. Prices in central Tokyo's Toranomon district, where the Toranomon Hills skyscraper complex opened in 2014, rose 17.1% in the 12 months through Jan. 1. Ongoing redevelopments in the area include a new station on the Hibiya subway line.
Prices surrounding Nagoya's main train station, where the 38-level Dai Nagoya Building opened March 9, have soared 36%. Skyscraper openings in the area are to continue through next year. Property prices look to keep climbing with a maglev train service to the station set to open in 2027, stirring expectations of future development.
Fukuoka also is experiencing a redevelopment surge. The JRJP Hakata Building, near Kyushu Railway's Hakata Station, will open in April. New hotels and additions aimed at drawing foreign visitors are springing up nearby. Competition for land by lodging and office developers is driving up bids. Some lots near the station reportedly have gone for three times last year's appraised value. Commercial land values in the area have climbed 24.5%.