Leopalace21 Corporation, a developer and manager of rental flats across Japan, has apologized after more of their apartment buildings were found to potentially violate the Building Standards Act. According to the company’s statement on May 29, several buildings in their ‘Apaato 6 Series’ of rental flats built between 1996 and 2009 were constructed without the required fire prevention and sound proofing walls. The company’s share price dropped by up to 14% on the morning of May 30.
According to Tokyo Kantei, the average monthly rent of a condominium in Tokyo’s 23 wards was 3,517 Yen/sqm in April, up 0.3% from the previous month and up 5.9% from last year. Rents have remained above the 3,500 Yen/sqm range since February. This is the fifth month in a row to see a year-on-year increase.
According to Tokyo Kantei, the average monthly rent of a condominium in Tokyo’s 23 wards was 3,508 Yen/sqm in March 2018, down 0.5% from the previous month but up 5.0% from last year. This is the 4th month in a row to record a year-on-year increase. The average apartment size was 55.49 sqm (597 sq.ft) and the average building age was 17.6 years.
According to Tokyo Kantei, the average monthly rent of a condominium in Tokyo’s 23 wards was 3,488 Yen/sqm in January 2018, up 0.4% from the previous month and up 4.7% from last year. This is the highest level seen since record-keeping began in March 2008.
According to Tokyo Kantei, the average monthly rent of a condominium in Tokyo’s 23 wards was 3,474 Yen/sqm in December 2017, up 4.2% from the previous month and up 3.6% from 2016. The increase was caused by a larger share of relatively new buildings which typically command higher rents, along with the release of a large number of brand new high-rise apartment towers in Shinjuku and Shinagawa.
According to Tokyo Kantei, the average monthly rent of a condominium in Tokyo’s 23 wards was 3,334 Yen/sqm in November 2017, up 0.8% from the previous month but down 0.5% from last year. Average rents have been down year-on-year since July, although they have been showing an increasing trend for apartments in buildings less than 10 years old.
Tokyo’s Ota Ward is the first district in Japan to ban all minpaku-style overnight or short-term accommodation in exclusively residential zones. On December 8, local councillors voted in favor of the ban with the rules to go into effect from June 15, 2018.
Ota was one of the first areas in Japan to actively promote and encourage short-term rentals. In January 2016 Ota ward allowed registered hosts of properties in approved ‘special zones’ to rent out accommodation for minimum stays of 6 nights without needing a hotel license. Normally a stay of less than 30 days would require a hotel license. Councillors have also voted in favor of reducing this stay to a minimum of 2 nights and 3 days.
According to Tokyo Kantei, the average monthly rent of a condominium in Tokyo’s 23 wards was 3,308 Yen/sqm in October, up 0.6% from the previous month but down 0.7% from last year. This is the 4th month in a row to record a year-on-year decline in rents.
Shopkeepers alongside the Nakamise shopping street, a 250 meters long souvenir shop-lined pedestrian mall leading to Sensoji temple in Tokyo, are reeling after being hit with a potential 16-fold increase in store rents. In September, Sensoji temple informed the tenants of plans to increase the rent from the current level of 15,000 Yen per month for a 10 square meter shop to a new rent of 250,000 Yen per month, making it in line with market rents for the neighborhood and ending years of subsidized rents that had been offered by the previous landlord – the Tokyo metropolitan government.
According to Japan’s Financial Services Agency’s Financing Report, the average vacancy rate for investment-grade apartment buildings is estimated to be around 7%. For ‘apaato’-type buildings less than 5 years old, the average vacancy rate was just 2.6%, but for a 10-year old building it was 7.1% and 11.6% for 20-year old buildings.
As buildings age, vacancy rates and maintenance costs increase, resulting in some investments becoming cash-flow negative for landlords. The Agency has requested that banks take more care to explain the potential risks and pitfalls of these type of investment loans to borrowers.