The Parkhouse Fukuoka Towers East – an opportunity to invest in Japan’s vibrant city with the youngest demographic

05 Sep 2019

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    One of the fastest-growing cities of Western Japan, Fukuoka is home to Japan’s youngest demographic. With rising prices of real estate and high demand for rentals, its local property market is attracting investors from various parts of the world.

     

    The capital city of Fukuoka Prefecture, it sits on the northern shore of the Japanese island of Kyushu as the business hub of Asia.

    Globally, Fukuoka is the second home to Fortune 500 companies, after Beijing.

    The city draws students and young entrepreneurs from worldwide because of its good educational facilities. uniRank, published the 2019 University Ranking of 30 recognised higher-education institutions in Fukuoka. The city closely follows Tokyo, Kyoto and Osaka in numbers of higher educational institutions.

    Source: Fukuoka Asian Urban Research Center (URC)

     

    Do the agile demographics of the city make it dynamic? The growing culture of start-ups and sharing economy are the answer.

    According to the Information & Strategy Office of the Fukuoka Asian Urban Research Centre’s Annual publication, “Fukuoka Growth”, Fukuoka occupies only a small share of the area and population nationwide, but larger shares in many of the other indicators.

    No wonder, international companies like Airbnb and Beijing Mobike Technology Co. Ltd. used Fukuoka as their test bed when entering Japan years ago.

    Today, Fukuoka trails only Tokyo and Osaka in having the highest number of Airbnbs in the city. Also, the shared-cycle concept has become the most popular mode of transport in the city – which is also due to the city’s cycle-friendly environment.

    Another survey in the Fukuoka Growth speaks about the city’s lifestyle, as about 96% of residents admitted they like Fukuoka, 95% found it highly liveable and 93% wanted to continue staying there.

    Source: The Information & Strategy Office – Fukuoka Urban Research Centre

     

    In 2012, the government declared this dynamic city as the “start-up city” and then designated it as a “National Strategic Zone for Global Startups and Job Creations” in 2014. Tapping the potential of start-up growth, it also introduced a business subsidy. In 2015, the start-up rate in Fukuoka was more than 7%, which was 1% more than that of the national average.

    What followed was the offer of “start-up visa” encouraging foreign nationals and “start-up tax reduction” targeting innovative businesses in the medical and advanced IT sector. All these were the first-ever trials in Japan.

     

    The major growth driver of the city is its upwardly mobile youth.

    “Fukuoka’s population is increasing, especially youngsters who rent as well as purchase condominiums. At the same time, minimum wages are also rising on an average by 3% over the last three years as compared to about 1% from 2009 to 2012”, says Kentaro Sato, Director of International Residential at JLL.

     

    In addition, Japanese law permits students to earn while they study which increases their purchasing power. According to JLL, the general trend in Fukuoka is that its residents utilise about 80% of their disposable income, which is the seventh highest in Japan.

    Due to this demand and the purchasing power, rental yields on investment are high.

     

    Source: Night view of Fukuoka by Suhyeon Choi , Unsplash

     

    Fukuoka’s dynamics also attract foreign nationals. The share of foreign nationals entering Fukuoka city is prominently high at 11%. According to Fukuoka Growth, every fiftieth resident in the city of 1,600,000, is a foreigner.

    Many of these expatriates come to Fukuoka for education and then decide to continue staying there due to city’s active lifestyle and opportunities. The increase in foreigners staying in Fukuoka city over the long term contributes to the increase of the population as well as gross city production.

    Many foreign buyers are also investing in properties here. The city facilitates real estate investment further with its relaxed rules. You don’t need citizenship or a residency permit. Furthermore, the city offers easy visa restrictions, convenient local and international transport connections, and investor-friendly regulations.

     

    The International Monetary Fund has also projected the nation to be ranked number three in the world for the highest GDP in 2019-2020.

    Today, the city’s growth has left behind the whole country in various indicators. The Japan-based Nomura Research Institute has ranked Fukuoka the number one city with the highest growth potential among 100 domestic cities. 

     

    Some indicators (2010 – 2016)

     

    Fukuoka

                      Japan

    Foreign residents

    34.80%

    11.70 %     (MOJ Immigration Bureau)

    Imports

    24.40%

    8.70%         (MOJ Ministry of Trade)

    Exports

    20.50%

    3.90 %        (MOJ Ministry of Trade)

    Foreign entrees

    238.40%

    145.90%    (MOJ Immigration Control Statistics)

     

          

    Fukuoka market shows positive sentiments

    Considering its strong economic status, investing in the Fukuoka is attractive.

    To cap it all, the Fukuoka rental market shows positive trends.

    According to JLL research, over 60% of the population lives in rented properties. Constantly rising demand has increased rental rates as well as property prices. This is also because the residential and office rents are about 50% cheaper than Tokyo hence high in demand.

    According to the letting and management consultants, Miyoshi Real Estate Co., Ltd., the vacancy rate for the units that they manage in Fukuoka is approximately 3%.

    This has been a phenomenal time for new lease agreements. Living proof of this is the eight new buildings under construction in Fukuoka all of which are almost fully occupied.

    However, currently, the centre for all attention in Fukuoka is the “Tenjin Big Bang” project.

    Located in the heart of the city, the project’s objective is the city’s revitalisation. Backed by authorities, the project offers various benefits and a relaxation of regulations. The project is expected to play a key role in the development of the surrounding areas.

    The cherry on the cake is the recent government’s Inns and Hotels Act for vacation rentals. This law allows people to open their homes for business opportunities.

    The Parkhouse Fukuoka Towers

    The other attraction is the development of The Parkhouse Fukuoka Towers East and West – one of the largest complexes in Kyushu occupying an area of 54,000 square metres.

    The East Tower houses 292 residential units and is situated next door to an expansive shopping mall, Mark Is Fukuoka Momochi, having 163 shops, restaurants, and a movie theatre.

     

    Photo: Mark IS Fukuoka Momochi, CGI rendition

     

    Photos: The ParkHouse Fukuoka Towers , CGI rendition

    Invest in Japan's Fastest Growing City - Fukuoka

    Find out more at our launch!

     

    To know more in detail about investment opportunities in Fukuoka, you can attend our event on September 7 and 8 at Hilton Singapore. We will also have a seminar on how the young Mayor’s urban and economic development plans are making Fukuoka one of the fastest growing cities in Japan.

     

    RSVP here

    For any further information, contact JLL International Residential directly at +65 9671 9583/ +65 6220 3888 or write to internationalresi@ap.jll.com.

                                         

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