Japan’s Fukuoka City Pushes Developers to Design Covid-resistant Buildings
The city is changing regulation to increase buildable space. Meanwhile, Japan’s vacancy rates continue to rise.
January 18, 2021 – As the Covid-19 pandemic continues to have an economic impact in Japan and across the world, an initiative that encourages the development of buildings resistant to viruses was launched in Fukuoka City, according to the January 2021 issue of the Nikkei Real Estate Market Report.
The goal is to prepare the city in the event of any infectious disease and at the same time, attract new businesses.
In August 2020, Fukuoka announced that it will incentivise developments in urban areas which integrate countermeasures against infectious diseases. The city will incentivise by granting more floor-area ratio (FAR) or increasing the amount of buildable space relative to the land area by up to 50%. Developers can benefit from this deregulation by designing and constructing ‘corona-free’ buildings. This is characterised by high ventilation performance, non-contact facilities, and physical distancing.
To allow for such features, the city government has extended the deadline for completing buildings in multi-block urban regeneration project Tenjin Big Bang by two years. The project was initially scheduled to be completed by the end of 2024.
Other countermeasures include the implementation of non-contact elevator systems and spacious walking space. Aside from aiming to become the first city resilient to infectious diseases, Fukuoka also aims to transform itself as a major international financial centre and increase investments from domestic and overseas companies.
Office Vacancy Rate Continues to Rise Moderately
Meanwhile, the office vacancy rate in Japan has continued to rise. As companies assess the impact of Covid-19, more companies are holding off on floor expansions and the opening of new offices.
According to CBRE’s survey of buildings with gross floor areas of 1,000 tsubos (3,310 sq. m.) or more, the vacancy rate was at 1.2% as of the end of September 2020. Miki Shoji, a major tenant broker, said that the vacancy rates of office buildings in the central area increased moderately for eight consecutive months to 3.58% as of November 2020.
Although this shows that vacancy rates remain at a low level and there are no signs of significant rent decrease, many local real estate businesses are concerned about the mass supply of office floors which will start this year.
According to CBRE’s estimate as of the end of September 2020, approximately 80,000 tsubos (264,000 sq. m.) of rental office floors will become available 2024 — more than 20% of the existing stock.