Foreign investment is playing a pivotal role in transforming Japan’s real estate scene, with a keen eye from Chinese investors. Recent years have witnessed a surge in the construction of apartment blocks within Tokyo’s 23 wards. Notably, the average sale price of newly built apartment blocks surpassed ¥100,000,000 at one point. This trend has been spurred by several factors, including the proximity of Japan and China, a favorable exchange rate, and the comparative affordability of prime Tokyo properties when measured against those in Beijing or Shanghai.

The ebbs and flows of China’s economy have also influenced this trend, with investors seeking diversification beyond their borders. To cater to this growing interest, property investment seminars targeting Chinese investors are frequently conducted online. YAK, a real estate firm founded eight years ago, is a notable player in this arena, with the majority of its employees hailing from China. Nearly 95% of their clientele is Chinese. One illustrative case is that of Mr. Zhu Zhong Lin from Shanghai, who visited Japan in December last year to explore property investment opportunities, guided by Mr. Xiao Ziyi from YAK.

During their exploration, they visited Nakano Street near Nakano Station, renowned for its cherry blossoms. Mr. Zhu expressed a particular interest in a high-rise block constructed in the 1960s, just a three-minute walk from Nakano Station. This property, despite its age, boasts a monthly rent of approximately ¥230,000 and was available for purchase at ¥45,000,000. Mr. Zhu, who owns three clothing boutiques in Shanghai, intends to rent out the property he invests in and, eventually, establish his own store in Japan.

A Look at Ms. Hong’s Investment Venture

Another noteworthy investor is Ms. Hong from Hong Kong, a successful entrepreneur with a wealth-building background in real estate projects. Her visit to Japan in January this year, accompanied by Mr. Koshimizu from YAK, led her to explore properties near Kawaguchi City in Saitama Prefecture. The property of interest was located near Kawaguchi-Motogo Station on the Saitama Rapid Railway Line, consisting of a block of apartments constructed five decades ago.

YAK’s investment in the property, which involved spending approximately ¥40,000,000 on comprehensive renovations, resulted in the availability of 16 two-bedroom apartments with an estimated monthly rent of around ¥90,000. The gross rate of return on this property stood at an impressive 7.03%, offering Ms. Hong the potential for an annual income of ¥25.2 million. The entire building was offered for sale at ¥358,000,000, a deal that Ms. Hong decided to pursue enthusiastically.

The Resurgence of Flower Land Kamifurano

Shifting our focus to Hokkaido, specifically Kamifurano, we find a picturesque summer scene adorned with vibrant flower gardens set against the breathtaking backdrop of the Tokachidake Mountain Range. Among these floral havens, Flower Land Kamifurano stands out, boasting an impressive collection of 450,000 flowers of 20 different varieties, including lavender, scarlet sage, and marigolds. President Kimitoshi Ito oversees Flower Land, supported by a dedicated team of six employees and 20 part-time workers.

Mr. Ito, originally a farmer cultivating potatoes and asparagus, not only sells his farm’s products locally but also extends their reach through online sales, shipping nationwide. The inception of Flower Land in May 1992 marked a transformation of a portion of the farmland into a tourist farm, subsequently evolving into the stunning attraction we know today.

However, Flower Land faced significant economic challenges in recent years, particularly during the onset of the COVID-19 pandemic. Annual tourist numbers plummeted from a peak of 440,000 to a mere 23,000 to 24,000 visitors. As tour groups declined and diverse tourist spaces became less accessible, the farm’s income dwindled, leading to a substantial debt of ¥120,000,000.

President Ito contemplated selling Flower Land for several years due to the absence of a successor to manage the farm. Despite consultation with Hideyuki Ishii, owner of the real estate business Nihon Shintatsu in Hokkaido, a suitable buyer remained elusive.

A New Chapter for Flower Land Kamifurano

In early April, a promising turn of events occurred when Mr. Lim Kia Hong, an IT and property market entrepreneur based in Singapore with a history of property investments in Japan, expressed interest in Flower Land Kamifurano. Discussions with Mr. Ishii culminated in Mr. Lim’s decision to invest in the tourist farm.

The sale process gained momentum, and in late April, Mr. Ishii, Mr. Ito, and Mr. Toshiaki reached an agreement. Mr. Ito’s brother would remain within the company to facilitate the training of the next generation, while Mr. Ito himself would continue overseeing the management of the flower gardens. The infusion of overseas investors is set to breathe new life into this beloved Hokkaido attraction, Flower Land Kamifurano.