Fukuoka City Records Highest Tax Income for Seventh Consecutive Year Posted On 25-08-2020

On August 4, Fukuoka City announced record-high tax revenues for the fiscal year of 2019. The city estimated a total income of ¥344 billion, up by 3.6% from the previous year. Thanks to population growth and an increase in home construction and renovations, the city collected more individual inhabitant tax (¥132 billion: +6.2%) and property tax (¥145 billion: +3.4%.) Meanwhile, the corporate tax (¥44 billion: -1.7%) was slightly lower than the fiscal year of 2018. However, under the impact of the novel coronavirus spread, the city anticipates its tax income for the fiscal year of 2020 will fall by more than ¥10 billion. Source: Sankei

https://www.fukuoka-now.com/en/news/fukuoka-city-records-highest-tax-income-for-seventh-consecutive-year/

Here’s Why Fukuoka is Called “A Paradise for Core Investors” Posted On 21-08-2020

Fukuoka has been attracting more attention as a real estate investment market in Japan. It is not only because of Tenjin Big Bang, a large-scale redevelopment project, but also because investors from both inside and outside of Japan highly value the steadiness of the city’s market fundamentals.

A deal to sell top commercial facilities in Tenjin area was closed

Alarge-scale deal to sell three commercial facilities owned by DAISHOU Co., Ltd. in Fukuoka’s booming Tenjin area, the focus of the “Tenjin Big Bang” project, has been closed. JLL assisted in the sale of the three buildings in Tenjin, Fukuoka city—Mina Tenjin, North Tenjin, and the E&Y Building—as said company’s dedicated advisor. They were bought by Fukuoka Standard Oil Co., Ltd., whose head office is located in Kurume City, Fukuoka Prefecture. The transaction was completed on June 29, 2018, for a total amount of roughly 26 billion yen. Although these three commercial facilities are quite old (they opened their doors around 1970), they have gone through effective renovations, and are recognized as some of the best community-based commercial facilities in the Tenjin area.

The buildings stand on the northeast corner of the Tenjin Hashiguchi intersection where Watanabe Street and Showa Street cross. This location is the heart of “Tenjin Big Bang,” a city revitalization project promoted by the city of Fukuoka, which includes relaxation of regulations regarding buildings’ floor-area ratio and other measures, and it is expected that the buildings will play a part in further development of the surrounding area. The buyer mentioned it is also considering revamping the buildings’ the facilities in the future. If they are rebuilt in the Tenjin Big Bang project, their floor-area ratio can be increased from the current 1000% to 1200%.

Market fundamentals are well-reputed

This deal may seem like it was closed for the purpose of rebuilding the three buildings as part of the Tenjin Big Bang project, but the boom in Fukuoka’s transaction market is not expected to be short-lived. “The commercial facilities whose sale we assisted in can be rebuilt with the current floor-area ratio and still be profitable enough. The buyer can expect a certain yield even if they own the properties long-term,” points out Takahiro Ozawa of the JLL Japan Capital Market Department, who was involved in this project. Tenjin Big Bang is no more than a secondary advantage, Ozawa says. “Population flows into Hakata from all over Kyushu, and market fundamentals are stable. Thanks to it, investors are rushing to Fukuoka from both inside and outside Japan.”

“Fukuoka is a paradise for core investors,” comments Koji Naito of the JLL Japan Capital Market Department. Among the cities designated by government ordinance (from October 2010 to October 2015), the population growth rate of the city of Fukuoka has increased the fastest, and its population rate of youth in their teens and twenties is also the largest. In addition, the average propensity to consume in Fukuoka Prefecture (share of consumption out of disposable income) is 79.8—the 7^th highest in Japan. Its purchasing power is known to be one of the strongest among greater metropolitan areas, and the number of foreign visitors to the area is also increasing steadily. As a result of these combined factors, retail facilities are attracting investment. “For example, there is a commercial building in a prime location in the Tenjin area owned by a foreign fund. Typically, properties should be sold after a specified period of operation, but this fund has expressed no intention of selling this property. In cases like this, Fukuoka can be an investment market where investors gain income by holding onto properties long-term,” points out Naito.

On the other hand, the office space market is booming as much as the retail facility market. According to a JLL survey, the vacancy rate of class A office spaces (the top 3% of the stock) in Fukuoka as of the end of the first quarter 2018 was 2.0%. The market rent has increased to 18,001 yen per tsubo. (A tsubo is a unit of area equivalent to approximately 3.3 square meters.) The supply is barely meeting the demand, and the market is now a lender’s market, in which rents tend to become higher. In addition, the success rate of lease agreements being signed for new buildings is at its highest ever. According to Naito’s independent survey, there are eight new office buildings being built in Fukuoka City from 2018 to 2021, and all of them are fully or almost fully occupied. The only building where offices with large floor space is still available is Tenjin Business Center, which is scheduled to be completed in 2021 and has not started to look for tenants yet.

We can also feel momentum in the changes in market rent for new properties. “The annual average contract rent in Nippon Building Fund Inc.’s Hakata Gion M-SQUARE (completed in June 2009, 10 stories, floor area of the standard floor is 542 tsubo) for the years 2011 to 2017 was a scant 1.7%,” explains Naito. He goes on to describe the strength and appealing points of Fukuoka’s office market: “While the current rent for said property is estimated to be about 14,000 yen per tsubo, contract rent for new leases is over 20,000 yen per tsubo now. Therefore, lenders can expect a substantial increase in rent if they change tenants. If we compare cap rates in office buildings in Fukuoka with those of similarly sized B-grade office buildings in Tokyo during the years 2011 to 2017, the buildings in Fukuoka all had a cap rate higher than those in Tokyo by about 1%, and were more attractive investments.”

Tenjin Big Bang boosts further development

In Fukuoka, few buildings have been rebuilt, due to various restrictions—for example, height restrictions imposed by the Civil Aeronautics Act—and there are not many properties that are still new and good for investment. Nonetheless, it is expected that more and more existing buildings will be revamped thanks to the extra capacity granted under the Tenjin Big Bang project. “Although development projects are driven by local prominent companies and developers in Japan, once the building is complete, condominium units may be put on the market,” comments Ozawa. Fukuoka is already a paradise for core investors, but thanks to Tenjin Big Bang, the city has potential to develop into an international investment market that can meet any demand.

https://www.joneslanglasalle.co.jp/en/trends-and-insights/cities/why-fukuoka-called-paradise-for-core-investors

Fukuoka Sakura Guide 2020 Posted On 01-04-2020

The blossoming of sakura (cherry blossoms) is an occasion for celebration all over Japan. Between late March and early April, families, friends and colleagues come together for ohanami or “blossom-viewing” parties, picnicking, drinking and even singing karaoke in the city’s public parks beneath the riotous pink blossoms.

Part of the magic of sakura is that you never know for certain when they’ll start to bloom or be in full bloom. To help you plan your ohanami with better probability, refer to this website which offers updated forecast for sakura all around the country.

• In Fukuoka, sakura have begun to bloom on March 17. Full bloom is expected on Mar. 28.
• Oita’s sakura have begun to bloom on March 20, with full bloom around Apr. 2.
• Nagasaki’s sakura have begun to bloom on March 22, with full bloom around Mar. 31.
• Saga’s sakura have begun to bloom on March 20, with full bloom around Mar. 29.
• Kumamoto’s sakura have begun to bloom on March 20, with full bloom around Mar. 30.
• Miyazaki’s sakura have begun to bloom on March 22, with full bloom around Mar. 31.
• Kagoshima’s sakura have begun to bloom on March 26, with full bloom around Apr. 6.

https://www.fukuoka-now.com/en/fukuoka-sakura-and-ohanami-guide/

JR Kyushu to Debut New Tourist Train in 2020 Posted On 25-11-2019

In fiscal 2020 JR Kyushu will debut a new sightseeing train that will travel through the seven prefectures of Kyushu. Industrial designer Eiji Mitooka’s designs will be used to renovate former Tsubame Express cars into luxury carriages. While the company’s first-class sleeper train Seven Stars offers overnight accommodation, this new train will be carrying passengers only during the daytime. Passengers can stay at hotels and ryokan of their choice. Detailed routes for the train will be decided in the coming months. Source: Mainichi Shimbun, 10/30/2019

https://www.fukuoka-now.com/en/news/jr-kyushu-to-debut-new-tourist-train-in-2020/

Fukuoka and Taipei Announce Line Cooperation Posted On 05-11-2019

The cities of Fukuoka and Taipei will begin the mutual use of their official Line accounts to distribute tourism and disaster information. In addition to local attractions that seldom appear in tourist guidebooks, the nearest evacuation shelters and other emergency information can be obtained during overseas stays. The COO of Line Fukuoka announced this first international project of its kind at an event on November 14 and expressed eagerness to further contribute to the development of smart cities using the company’s services. Source: NHK News Web, 11/14/2019

https://www.fukuoka-now.com/en/news/fukuoka-and-taipei-announce-line-cooperation/