Major Japanese real estate companies are stepping up their efforts to aid industry development by providing support for corporate research and development and investing in startups.
The developers expect that these companies will utilize the urban spaces they have developed, and that this will lead to the vitalization of the areas.
If these areas become home to numerous cooperating companies and research institutions, they could develop into hubs for gathering and exchanging information. The developers hope this will drive up rents for offices and facilities as well.
On Aug. 31, Mitsui Fudosan Co. announced that it had established a fund totaling 7 billion yen to invest in startups in fields such as pharmaceuticals, medical equipment and regenerative medicine. It expects to invest in about 10 companies. Mitsui Fudosan will encourage the companies it invests in to use its rental lab and office service for their research and development. This initiative is meant to both nurture startups and drive traffic to the developer's own facilities.
"Counting those in the planning stages, we have 12 facilities in Japan (for the rental lab and office service)," said Takashi Shiotani, an executive officer of Mitsui Fudosan. "We expect demand to roughly triple going forward."
Mitsubishi Estate Co. launched a business and industrial support facility named Minoriwa in the Otemachi Gate Building, which opened this summer in Tokyo. The facility is aimed at fostering interaction between producers -- such as farmers -- and food and beverage companies. The facility features offices and a rental space equipped with a kitchen, which can be used for creating prototypes and gathering ideas from other companies that use the facility, across industry borders.
Tokyu Land Corp. has launched an exchange hub near Tokyo's Shibuya Station to foster collaboration between industrial, academic and government entities in fields such as AI and robotics. The facility hosts lectures and events to facilitate interaction between global and domestic enterprises and researchers.
Expecting increase in rental income
The reason why major real estate firms are stepping up their industry development efforts is that they expect the empowerment of the towns and areas they develop to lead to an increase in rental income. There is also the potential for the technologies and industry-specific knowledge possessed by startups to be used to drive the development of new properties and business opportunities.
Since 2016, Mitsui Fudosan has been attracting companies and establishing bases in the fields of pharmaceuticals, aerospace and semiconductors in areas such as Tokyo's Nihombashi district, where the company has a strong footing. The effort has created an environment where related companies and investors can easily network, leading to the vitalization of these areas. The business model of serving as an "industry developer," promoting industry growth through urban development, is positioned by the company as one of its growth strategies.
"Efforts to support industries aimed at enhancing the appeal of office spaces will likely continue to expand," said Junichi Taguchi of real estate services firm CBRE K.K., who specializes in the domestic real estate market. "Real estate companies have to differentiate themselves by choosing which sectors to focus on."
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This article is from The Yomiuri Shimbun. Neither Dow Jones Newswires, MarketWatch, Barron's nor The Wall Street Journal were involved in the creation of this content.
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