The snow-covered slopes of Japan’s Niseko region on the island of Hokkaido are a mecca for skiers. They are also where property developer AP Land Bhd sees investment potential for its latest development — a high-end ski resort-cum-home complex called Shiki Niseko.
“Niseko has plenty of natural assets, which significantly differentiate it from other high-end ski resorts,” Low Su Ming, joint managing director of AP Land Bhd, tells City & Country.
“Shiki” in Japanese means four seasons. Thus, Shiki Niseko is not only a ski resort, but also a growing four-season destination that offers year-round activities. It is situated in the village of Hirafu, which is a two-hour drive from New Chitose Airport and under two hours from Sapporo, Hokkaido’s capital city.
Niseko is a small farming community with a view of Mount Yotei, fondly called the Mount Fuji of Hokkaido. Described by Low as the Aspen of the East, it is famous for its powder skiing and was voted by Forbes Traveller Online as the second snowiest resort on the planet and the best ski resort in Japan. The ski season starts in November and ends in April.
The Niseko region was discovered by the Australians who loved skiing on the powdery snow, with a water content of under 8%. As word of its superb ski conditions spread, development came to the area. Hirafu is one of the more developed towns with businesses and accommodation for locals and tourists.
“There is a misconception that Japan is an expensive place to visit, but prices in Niseko have not really caught up and a good holiday can still be enjoyed at a reasonable price,” Low observes.
In 2007, Low visited the area on the advice of her brother, who had a gut feeling that the area would have development potential. She was immediately captivated by the culture and way of life of the people living in the area. “The skiing was a bonus,” smiles Low.
In 2008, AP Land bought just under an acre of land and set in motion plans to launch Shiki Niseko. However, when the 2009 global financial crisis struck, the plans were put on the back burner until last October when the property was officially launched.
Shiki Niseko has a current take-up rate of 30%, mainly by Malaysian investors. Low says this surprised her, although she is confident the property will do well as the development caters for Asian sensibilities.
“Shiki is not your typical development. Our concept caters for Asian visitors — discerning lifestyle seekers who not only enjoy winter sports but also fine food and year-round activities.”
AP Land will preview Shiki Niseko in Singapore next January but those who want to have a closer look at the units on offer could pop over to Niseko this month as the show unit is already up and ready for viewing.
Shiki Niseko was designed by international Australian firm DBI Design Pty Ltd and will have an upmarket “hotel” ambience, says Low. “There will be a fireplace in the lobby and 10,000 sq ft of retail space and restaurants for residents and visitors.”
The 7-storey building sits on 0.85 acre of freehold land and faces the main road. It is situated close to the ski lifts and other amenities and is designed to weather the four seasons, making it an ideal place to visit any time of the year. Its gross development value (GDV) is ¥5.6 billion (about RM212 million). Construction starts in April 2011 and is scheduled for completion by end-March 2013.
There are 69 fully furnished units, which offer one, two or three bedrooms and 2-bedroom penthouses. The 3-bedroom units are divided into a 2-bedroom section and a studio apartment with its own entrance, so that owners can rent it out while they enjoy their holiday.
The built-ups range from 990 to 1,367 sq ft for the penthouses (price: from ¥91 million) and 624 to 1,636 sq ft for the rest (from ¥50 million). Rental yields are expected to be 3% to 4% a year.
Niseko-based Australian company LJ Hooker is handling sales at Shiki Niseko and provides asset management of the units on behalf of the owners.
Low says the development offers good investment potential as Niseko attracts about 1.5 million Japanese and international visitors a year. Tourist arrivals were up 25% over the 2009/2010 ski season compared with previous seasons. As the numbers rise, AP Land is targeting high net worth individuals who want to tap the increasing tourist numbers and invest in a property that can be rented out as well as provide a place to stay when the owners come visiting.
“We see great growth potential for Shiki not only during the ski season but also in the other seasons,” Low says.
There are Japanese government initiatives, including more infrastructure development, to improve summer tourism.
“The local council and the Niseko Promotion Board are improving the infrastructure in and around Hirafu in view of the increasing number of visitors,” Low says. “A report by a local developer says the summer market will grow faster and become as important as winter by 2015 or 2016.”
Although investments, particularly from Australia, the US and Europe, have dropped due to the global financial crisis, the Niseko area has been attracting investors from Asia, such as China, Hong Kong and Malaysia.
A report in Nikkei Business online says construction has already begun on a resort development by Nihon Harmony Resorts, a subsidiary of Pacific Century Premium Developments — part of PCCW Group of Hong Kong. Malaysia’s YTL Hotel & Properties bought Niseko Village Ski Resort in April to develop and renovate the existing structures. Nikkei Business reported in September that YTL was renovating the Green Leaf Hotel — the older of the two former Niseko Higashiyama Prince Hotels — in Niseko Village.
Shiki Niseko is the first international development in Japan for AP Land and as it continues its expansion and diversification, the company plans to develop more projects abroad, including in China, Japan and Indonesia.
In China, AP Land is involved in a retail development in Changshu City called Platinum Galaxy Boulevard that sits on 16 acres and will have a GDV of RM363 million upon completion. In Indonesia, the group plans to expand its oil palm plantation, which it acquired in late 2007, over the next five years.
In Malaysia, “other than our newly completed myHabitat in the KL city centre, we are also planning a niche lifestyle project in Penang, slated for launch in 3Q2011”, Low says, adding that the project is still in the planning stage.
The developer has recently completed myHabitat, which comprises serviced residences on 1.42 acres of freehold land in Jalan Aman. The project, consisting of 383 units in two 38-storey blocks, has a GDV of RM380 million. Built-ups in Tower 1 range from 1,141 to 1,496 sq ft. In Tower 2 (called myHabitat2), built-ups are from 603 to 1,141 sq ft. Unit prices in the first tower, which is 90% sold, start at RM1.2 million. The starting price in the second tower, which is 80% sold, is RM950,000.
This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 836, Dec 13-19, 2010
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