Mitsubishi Jisho Residence is entering the building renovation and resale market with their first project in Shirokane now on sale. With a severe shortage of apartment development sites, high land prices and construction costs, developers have been turning to their attention to the resale market. Rental apartment buildings are being bought up by major developers, tenants slowly evicted, and the vacant and renovated apartments offered up for sale individually on the resale market.
Tokyu Land, NTT Urban Development, and Grosvenor are already active in this market.
The first of Mitsubishi’s renovations and resales is The Park Remoa Shirokanedai 3 Chome.
The 4-storey, 14-unit apartment building is near Shirokanedai Station. Built in 1987, the former URD Shirokane Hills expat-rental building contains large apartments all over 200 square meters in size. Mitsubishi renovated the building in late 2016. Despite the large size, the second bathroom was removed in the renovated apartments, leaving them with a single bathroom.
Sales started at the end of January and apartments are priced between 288 ~ 424 million Yen (2.56 ~ 3.77 million USD), with an average price of around 1,500,000 ~ 1,800,000 Yen per square meter (1,240 ~ 1,490 USD/sq ft). Back in the late 1980s, these apartments could have fetched as much as 6,000,000 Yen/sqm.
Mitsubishi acquired the building in March 2015 and evicted all tenants by March 2016. The building’s exterior and interior courtyard was updated, and new security systems, including auto-lock, as well as parcel delivery lockers were installed. The apartments’ central heating and cooling systems were replaced with individually controlled air-conditioning units. Windows were replaced with double-pane glass, while additional insulation and floating floors were added.
The company plans to achieve annual sales revenue of 10 billion Yen from their renovation division, with as many as 500 ~ 600 renovated apartments to be sold each year.
Sources: The Nikkei Shimbun, January 16, 2017.