Mitsubishi Jisho to market its condos in Malaysia

The Parkhouse Nakano Tower

AFTER eight years of selling its condominiums overseas, Japan’s Mitsubishi Jisho Residence Co Ltd is finally bringing its brand of condos to Malaysia.

Mitsubishi Jisho is part of Mitsubishi Estate Group (MEG) and was founded in 2011 to reinforce the residential segment of the group’s business. It mainly develops condos in Tokyo as well as in Osaka, Hiroshima and Sapporo, among others.

MEG’s history stretches all the way back to 1890 when it acquired its first parcel in Marunouchi, Tokyo. The group launched its first condominium, Akasaka Park House, in 1969 and has not looked back since. Mitsubishi Jisho continues its work today and the Parkhouse has since become the developer’s signature brand.

“This is our first time in Malaysia. That is why we are bringing one of our most popular developments in the domestic market — The Parkhouse Nakano Tower,” says Ryou Sakuma, leader of sales group 1, West Tokyo department.

The Parkhouse Nakano Tower comprises 178 units of 1, 2 and 3-bedroom apartments in Nakano-ku, Tokyo. According to Sakuma, the development has the latest anti-earthquake technology known as “Damping Structure”, which absorbs shakes.

“The façade of The Parkhouse Nakano Tower and the design of the common areas offer a hotel-like atmosphere and distinguishes it from other condo projects in the past,” says Sakuma.

The common areas and the sky suites on the 21st floor are designed by Royal Park Hotels and Resorts and MEG’s MEC Design International. They used their know-how to create welcoming spaces, he adds.

According to Sakuma, the use of luxury furnishings, lighting and artwork provide
elegance to the private space.

The units have built-ups of 41.13 to 76.41 sq m and are priced from ¥50.58 million (RM1.9 million). All units come with a cooking stove, dishwasher, rubbish disposal and ventilation hood in the kitchen, and floor heating in the living and dining rooms.

“To make the development more suitable for foreign investors, it is designed to have more 1 and 2-bedroom units than 3-bedroom ones,” says Sakuma.

MEG is involved in the management and maintenance of the development and provides a 10-year warranty for defects in the structure and a two-year warranty for fixtures and equipment.

Jones Lang LaSalle (JLL), its exclusive agent, will be holding a preview of the project on July 23 and 24.

An evolving neighbourhood

Nakano was developed as a central provider of food for the city during the Edo period (1603 to 1868). Today, the area is a bustling hub of activity with a cross-cultural reputation.

It is set to evolve with a redevelopment project, which covers about 110ha with Nakano Station as the centre. The 16.8ha Phase 1 comprising commercial, retail and residential projects as well as educational institutions, hospital and park was completed in 2012. Nakano 5-Chome, where The Parkhouse Nakano Tower is located, will be redeveloped as well and is estimated to be completed in 2031.

“Due to the massive redevelopment around Nakano Station, future growth is expected. And a high-rise condominium along the JR Chuo Line is rare, so that makes it attractive from a wealth preservation perspective,” says Sakuma.

The Parkhouse Nakano Tower is six minutes’ walk from Nakano Station, where the JR Chuo and Sobu lines as well as the Tokyo Metro Tozai Line operate.

“The JR Chuo Line runs from the west to the east of Tokyo. The rapid train stops at Nakano Station and brings passengers to the Shinjuku business district in four minutes with one stop, and the Marunouchi business district in 17 minutes with five stops.

“Trains on the Metro Tozai Line can reach the Otemachi financial district in 19 minutes. So, from Nakano Station, you have access to three major business districts in Tokyo. This gives value to the development and broadens the target tenants as many people work in these business districts,” says Sakuma.

He points out that high-rise condominiums along the JR Chuo Line are very popular in Japan for sale and rental, and are also very rare.

“The JR Chuo Line is the main driver and contributes to about 50% of the sales in the domestic market for the project,” says Sakuma.

According to JLL Japan capital markets international director Akihiko Mizuno, Tokyo’s sub markets such as Shinjuku and Shibuya have developed around train stations and people are moving more to areas around the stations.

Mizuno“With the redevelopment project and the popular JR Chuo and Metro Tozai lines, Nakano has become one of the key stations in central Tokyo. The redevelopment around Nakano station will enhance the convenience of the station, which will impact the property market positively. This is especially true of Phase 2 of the redevelopment, which is near the station and on the station itself,” says Mizuno.

According to data from the East Japan Railway Company, Tokyo Metro and Tokyo Metropolitan Government, the current population of Nakano is 324,552 and it has seen 8% population growth in the last five years, exceeding the average population growth of Tokyo’s 23 wards.

Nakano saw a 21% increase in foreign residents in the last five years, ranking second among the 23 wards. It also has the highest population ratio of 20 to 39-year-olds among the 23 wards.

Key drivers

JLL Japan’s Mizuno says, traditionally, Nakano sees strong demand for 1-bedroom apartments due to the high ratio of single-person households.

“They are mainly singles who work in the central business district or are university students. The Parkhouse Nakano Tower has higher quality specifications and security compared with its competitors, so it can attract relatively richer tenants for higher rent.

“Having said that, Phase 1 of the redevelopment project, which was completed in 2012 with a park and retail shops, will attract families for 2 and 3-bedroom units. They are in short supply now. Nakano is ranked No 1 in the rental market in terms of residents’ satisfaction,” says Mizuno.

As for capital appreciation and rental yields, he says the administration and the Bank of Japan foresee an inflation rate of 2% per annum.

“It is fair to say that we can expect at least 2%. Given that the growth of property prices usually exceeds the inflation rate, condos near popular stations in Tokyo have a chance to enjoy higher capital appreciation.

“The gross rental yield is around 3.5% to 4.4%. Given the rental yield in super prime is about 3%, domestic investors find the area attractive,” says Mizuno.

With much uncertainty in London following its decision to withdraw from the European Union, countries such as Japan may have more to gain.

CBRE head of research for Asia-Pacific Henry Chin told Singapore on July 1 that Tokyo, Sydney and China’s Tier-1 cities are his top picks in Asia-Pacific as defensive plays for investors. Much of this is due to their market fundamentals.

JLL also placed Japan on top of its list of attractive investments, Bloomberg reported on July 7. JLL managing director of residential and investment Joseph Tsang said some residential projects have yields as high as 7%, after taking into account Japan’s negative interest rates.

However, the negative-rate policy is raising concerns that it will fuel the overheating of the property market.

“I don’t think the negative-rate policy is overheating the property market as the interest rate has been very low for many years. In a few super prime areas in Tokyo such as Roppongi and Azabu, condo prices have increased to the levels of London and New York. However, condo prices in most of the main areas of central Tokyo have been increasing modestly by 5% to 10% per annum,” says Mizuno.

He adds that the Tokyo Olympics in 2020 is one of the main drivers of growth in the Tokyo residential market.

“Developed cities such as Sydney and London saw continuous capital appreciation as they headed towards the Olympics and even after the games. And urbanisation will drive the population to the city centre. That is why the population growth in Tokyo’s 23 wards is higher than Japan’s,” says Mizuno.

This article first appeared in City & Country, a pullout of The Edge Malaysia Weekly, on July 25, 2016. Subscribe here for your personal copy.

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