Leopalace21 welcomes players in expanding apartment business across Asia

[Country Business Reports interviews and articles by Discovery Reports www.discoveryreports.com]

Conceived for utmost functionality and innovation, apartments of Leopalace21 cater to tenants’ every need. However, as Japan’s leading property developer and leasing manager looks to expand its operations across Asia, the company is creating excitement not only among potential tenants from Asia. With an excellent cash-flow position and nearly half a decade of experience in the field, Leopalace21 is also offering Asian landowners and real estate players such as construction companies a business opportunity that is difficult to ignore.

“We are thinking about mergers and acquisitions [M&A] or general acquisitions,” says president Eisei Miyama. “I guess there are two strong points for the company. One is that we have a lot of experience in Japan concerning property and tenant management. I think such know-how is not that strong in the other countries in Southeast Asia, so we have a strong point here. Secondly, we have a lot of cash that we can leverage and use to invest in Asian countries.”

Miyama is not exaggerating about Leopalace21’s expertise in the field. He pulled out a map of Japan and showed the company’s extensive apartment network nationwide. From Hokkaido in the north through to Okinawa in the south, Leopalace21 has a total of 570,000 rooms available for rent.

Excellent service features

Leopalace21’s large following in Japan has been driven by its passion for ensuring total customer satisfaction. Committed to become a one-stop solution provider, Leopalace21 differentiates itself in the market by providing added value.

The apartments are fully furnished with an air-conditioner, TV, washing machine, refrigerator and microwave, which are rarely included in most apartments in Japan. In addition to this advantage, the company’s “my DIY” programme allows tenants to choose a wallpaper design to suit their preferences.

Leopalace21 also provides tenants with state-of-the-art technologies developed especially for the apartments. One of such devices is the Life Stick, a slender white remote control attached to the TV set via HDMI or USB connection. The gadget can access LEONET, an in-house internet service that allows clients to surf websites, watch movies, play games, shop online and monitor garbage collection schedules.

The LeoRemocon, on the other hand, is a sophisticated learning remote control that can automatically configure apartment settings. Using internet-of-things technology, LeoRemocon is capable of checking current environmental conditions and use such information to adjust the settings of the apartment’s air conditioner or lights to provide optimal humidity or brightness. An environment map displays the status of the rooms at a glance, including hot and dry zones, and suggests solutions for the tenant. LeoRemocon can respond to voice command and is also linked to the global positioning system sensors of smartphones, enabling the gadget to turn on or off appliances based on the location of the tenant.

Competitive pricing

Leopalace21 delivers all these conveniences at a competitive price point. In addition to providing all furniture and electric appliances, the company also waives all other fees traditionally charged by lessors in Japan. Leopalace21 does not require tenants to pay a deposit equal to one to two months of rent for possible damages that will be caused by the tenant.

The company has also waived the brokerage commission, which is equal to one month of rent, and the gratuity fee, which is equivalent to up to two months of rent. The brokerage fee is the payment made to the real estate agency as a reward for finding the tenant, while the gratuity fee is a non-refundable payment made by the tenant to show gratitude to the owner of the apartment. For international students staying in Japan, Leopalace21 offers special promotional campaigns such as discounted rental rates and a free stay for a whole month.

Tenants planning to stay for only a month can take the monthly contract and simply extend the agreement on a daily basis if they need to stay longer. For tenants planning to stay in the apartment for at least a year, Leopalace21 offers the Chintai contract. Under the agreement, customers may opt to purchase “right of use” tickets, which are good for a month each. The tenants may choose among the different available units across Japan. They also have the option of apportioning the tickets only for the months they need to use the apartments.

Growing presence in Asia

Soon, more customers in Asia will experience the same level of quality and commitment Leopalace21 has been known for in Japan and select Southeast Asian countries. To date, the company has launched serviced apartments in Vietnam, Thailand and Cambodia. In Vietnam, Leopalace21 has master leased a property from a landowner and subleased it to tenants. For Thailand and Cambodia, the company owns the land and the apartments.

“We are investing in the development not only of residences but of other property types as well,” Miyama says. “We are evolving to become a localised construction and full-service company in each of the markets we enter.”

Leopalace21 has grown into the business of office space rental. Its serviced offices in the Philippines, Myanmar and South Korea come with everything that companies require to conduct business. The sites in Manila, Yangon and Seoul come with desks, chairs, internet connections and other communications equipment, a reception area, shared conference rooms and cafeterias. These offer lower initial costs than the traditional office and allow companies to begin doing business right away.

The locations can be used for setting up a new business base, a small office, or for any number of other purposes. Besides shared offices and co-working spaces, the Manila, Yangon and Seoul sites also offer the virtual office concept where Leopalace21 leases the address required for corporate registration so clients can list their office location in these premiere business districts.

Leopalace21 is also looking into opportunities in the areas of elderly care. Though the company believes the regional demand for such properties and services may not come up until between 15 and 20 years into the future, the need for such offerings may come earlier for China. The company, however, wants to study the investment environment in China further before investing. Leopalace21 already has four offices in China tasked mainly with attracting tenants and promoting international exposure for the company’s properties for now.

“We are in the process of acquiring more and more properties, and our main goal is to provide high-quality Japanese apartments and other related services to the Asian market,” Miyama says. “In the past, we could only concentrate our efforts on the apartment business, but as we have grown earning-wise today, we can invest in new businesses overseas. We are pinning our hopes on the Asian market.”

Committed to raise the share of its businesses in Asia to about 25 per cent of overall profits, the company is on the lookout for partners and companies to acquire. The company has no preferred target firms for its M&A strategy across Asia, but is excited to meet players in the construction industry and individuals and organisations that own land overseas. Leopalace21 also welcomes collaboration with Japanese companies doing business overseas.

“There are a lot of companies that do only construction in the Asian market. We as a company, however, do not only build but are also able to manage apartments and other properties while making a lot of profit in the leasing business as well,” Miyama says.

In addition to this, Leopalace21 has also gained broad experience in working with landowners, and has always come up with excellent ways to use land. The company has developed win-win business models with landowners. These include master leasing the property, which guarantees the owner of the land a steady income from his property for the next 30 years. Under this scheme, the landowner does not have to worry if the apartments are actually taken up by tenants.

“Our strongest points are our experience and know-how in property development and management for residences and other types of properties in Japan and other markets in Asia. As such, if other industry players are contemplating about potential income gains, I think we may be the best company to partner with in this regard,” Miyama says.

www.leopalace21.com