Japan’s Mori bets buyers will shell out upwards of US$9m on luxury flats in Tokyo’s Toranomon area
Competitors such as Nomura Real Estate and Mitsui Fudosan too are building upscale flats as foreign interest in Japanese property rises
Mori Building has started work on a luxury residential development in Tokyo that will include units priced from 1 billion yen ($9 million), betting there is untapped demand for the most upscale flats in the city.
Japan’s biggest privately owned developer is constructing three buildings at a cost of about 400 billion yen in the central district of Toranomon, home to many of the capital’s office towers and embassies, said Hideto Oba, executive managing officer, in an interview. The development, which includes a 54-level structure, is scheduled for completion in around 2020, he said.
“We see expansion in the market for residences that will satisfy the needs of wealthy individuals from Japan and overseas,” said Oba. “The stock of the kind of homes that rich people want to purchase is limited in Tokyo.”
Mori Building’s competitors Nomura Real Estate Holdings and Mitsui Fudosan are also developing high-end units as foreign interest in Japanese property rises. Tokyo’s market for luxury residences lags behind other major global centres by both supply and price, although that is beginning to change, according to consultancy Jones Lang LaSalle.
“In terms of pricing, Tokyo is finally catching up to London,” said Koji Naito, director for Japan capital markets research at Jones Lang LaSalle in Tokyo. “Luxury condo prices have arguably been appreciating in the past several years and it is expected that the current trend will continue.”