The debate regarding the role of the office for larger companies and flexible working arrangements for their employees, and how it is likely to impact their corporate footprint and in turn the real estate industry, will certainly continue for some time. It will be interesting to see how it plays out over the years to come and impacts the real estate markets in the major gateway cities globally. The article below is worth a read for those interested in the topic.
Large Japanese corporates may have been a little late to adopt flexible working arrangements, however, they are now well and truly on the bandwagon going by recent announcements. NTT has just announced they will let 70% of staff work from home, up from a recently set target of 50%. This news is on the back of similar announcements by other large corporates including KDDI, Hitachi and Fujitsu, some of Japan’s largest employers. Covid is certainly shaking things up on the occupier front, which will have an impact on investment in the office sector in Japan going forward.
At Nikota, we are positive on the outlook for Yokohama and believe the area is likely to be one of the out-performers over the coming years due to the following:
- Current supply/demand dynamics and rent levels across most asset classes
- Numerous deep demand drivers for the local economy with a strong focus on R&D
- The affordability of accommodation and livability of the area, especially when compared to Tokyo
- The ongoing, active discussion amongst Japanese corporates on flexi-working and increasing employees ability to work from home and decentralized hubs going forward
- Potential development of Japan's first, or one of their first, casinos/integrated resorts
Below is the link to an interesting report published by Savills recently on Yokohama which touches on some of the abovementioned points.
The Yokohama government is moving forward with the planning for the integrated resort despite the headwinds. It is set to provide a major boost for the economy and tourism in the area. Exciting times for Yokohama, and for the whole of Tokyo given Yokohama is on its doorstep.
This snapshot of the Japan hotel market by Savills Hotels highlights some of the interesting dynamics at play in the market. There is no shortage of hotels deals in the market at present, especially 2 to 3-star properties, however, few tick the important boxes - quality hardware, convenient location, scale (well over 100 keys), and a good operator. The properties with operators/brands that resonate with both domestic and international tourists and business people are set to be the out-performers over the coming years.