Floor Area of Construction Projects in Japan Shrinks in Q2, Survey Reveals
Fewer retail and hotel projects were seen.
The total floor area of new construction projects in Japan’s two largest cities declined by 68% in the second quarter, compared with the first three months of the year, with fewer large-scale projects registered.
According to Nikkei Real Estate Market Report’s quarterly survey, the number of new projects in Japan and Yokohama fell to 130 in late April to mid-July. This is down from 139 projects registered between January to mid-April. The aggregate gross floor area (GFA) declined 760,000 square metres (sqm) to 2.36 million sqm. The relatively small aggregate GFA for the period was attributed to a fall in the number of large-scale projects.
For the second quarter, of the 130 construction signboard installation applications surveyed, only 15 were large-scale development projects with a GFA of 10,000 sqm or more. Of these, there were only two projects over 100,000 sqm.
These numbers are in contrast to the data in the previous quarter’s survey, where 28 of the 139 construction signboard installation applications surveyed were large-scale development projects with a GFA of more than 10,000 sqm. Of these, there were seven projects over 100,000 sqm.
Minato Ward Had Most Projects
The largest project in the most recent survey was D Project Koto Fukagawa. Its developer is DH Asset One TMK, a unit of Daiwa House Industry. The project includes the construction of logistics facilities as well as a data centre, office, retail store and nursery school with a floor area of totalling about 138,000 sqm. Construction is expected to complete in March 2021.
Of the 15 large-scale development projects during the period, seven projects were for residential use, followed by education and research facilities with three projects. Office use comprised two projects and warehouse use also two projects.
Data also showed a decrease in the number of new projects in the retail sector — from 16 recorded earlier this year down to five. Hotel sector construction was also down from 11 in January to mid-April to five in the second quarter.
The decrease in the two sectors was partly offset by the rise in construction in other sectors, particularly in the residential and office space.
Looking at the projects by location, Minato Ward had the most among the five central wards of Tokyo with 20 projects, followed by Shinjuku Ward with 18 projects. Shibuya Ward has 16 projects, Chuo Ward with 14 projects and Chiyoda Ward seven projects.
There were three projects in the remaining 18 wards and 52 projects in Yokohama City.