Thank you for coming into our website. Fukuoka Properties Company Limited (FP) welcomes you to join us into the Exciting and Excellent investment opportunities in Fukuoka, Japan.

Let's take a look at Japan:

Japan consists of 4 main islands and more than 6,000 islands of varying sizes. The 4 main islands are: HOKKAIDO, HONSHU (consists of Tohoku, Kanto, Chubu, Kansai and Chugoku), SHIKOKU and KYUSHU.

Japan has a total of 47 Prefectures and these are often grouped into 9 regions:

  1. Hokkaido
  2. Tohoku
  3. Kanto
  4. Chubu
  5. Kansai
  6. Chugoku
  7. Shikoku
  8. Kyushu
  9. Okinawa

There are 7 Prefectures in Kyushu and the Fukuoka Prefecture is the largest in terms of population density and industrial concentrations with focus on automobiles (Toyota, Nissan, Daihatsu) and semiconductors (Accounts for 25% of Japanese domestic production value)

In terms of GDP, Fukuoka Prefecture boasts a GDP of over USD 155 billion, whereas the GDP of Kyushu as a whole, is in the vicinity of USD 430 billion. (Sources from: Jetro Fukuoka)

Fukuoka Prefecture has seen an increasing foreign investments over the years especially from China, South Korea, India and other Asian nations. Fukuoka Prefecture's strategic location, excellent transportation network and infrastructure give it a strong competitive advantage over the other prefectures in Japan.

There are 28 cities in the Fukuoka Prefecture and the Capital City is Fukuoka-Shi.

Fukuoka-Shi (City) is in Fukuoka Prefecture which has a population of over 5 million people. It is a major city in Kyushu, Japan's third largest island, and is one of Japan's five largest cities, after Tokyo, Osaka, Yokohama, Nagoya and Sapporo.

The Global Credit Research, May 2013, Moody's has assigned a Aa3, stable rating to the domestic bond issued by Fukuoka City which is the same as the Japan Government Bonds ratings. Fukuoka's ratings reflect the city's multi-year fiscal improvement plan aimed at improving its financial performance, as well as its growing importance as an economic center on the island of Kyushu. (Sources from: www.moodys.com - fukuoka_creditrating.pdf) Below are Fukuoka City's Main Credit Strengths:

1)       Improving fiscal outcomes and expected debt reduction.
2)       Important economic position as a regional economic center
3)       Strong national oversight of local government finances
4)       High likelihood of extraordinary support by national institutions to prevent local government default.

Fukuoka City is ranked 12th in the Monocle's Most Livable Cities Index 2012. Tokyo ranked 7th, Hong Kong ranked 13th, Singapore ranked 15th. Fukuoka was praised for its green spaces in a metropolitan setting.

The Index is meant to present top locations in the world for quality of life. Important criteria such as Safety, International Connectivity, Business Conditions, Quality of Architecture and Pro-active Policy Developments and Medical Care are highly valued in this survey.

As of May 2013, (Sources from "The Mainichi" news), Fukuoka's City's population tops 1.5 million, extract as below:

"The population growth is attributable to young people's moves to the city from other parts of Kyushu and an increasing number of people who moved from the Tokyo metropolitan area after the 2011 earthquake and tsunami disaster that devastated the northeastern region, according to the city office."

In terms of health, sources from World Health Organisation: 2010, Life expectancy in Japan ranks Number 1 at 82.73. The Median age is estimated at 44.6 years old. As of July 2011, Fukuoka is the most populous city in Kyushu and is Japan's the 6th largest city and it is the 2nd youngest city in Japan with median age at 38.6 years old.

Fukuoka City is fast catching up in terms of its infrastructure and business environment, however its cost of living and housing alternatives remained low in comparison. A 20 year old apartment of 20 sq. m. in downtown area will cost an average of 4 - 5 million yen, with a gross rental yield of 12% - 15% whereas a similar one in Tokyo may cost anywhere from 10 - 15 million yen with average gross rental yield of 6% - 7%.

For commercial units, the gross unleveraged yield can range between 10% - 20%, depending on the location and the conditions of the building. The growing population and incoming migrants from other parts of Japan as well as the increasing business activities brings great potential for housing and office demands.

As a gateway to Kyushu and Asia, Fukuoka boasts a highly developed and compact Transportation Network. The chart below illustrated its relative proximity to the main Asian and local destinations.

Being the center of Kyushu, Fukuoka has developed a highly concentrated transportation network of airports, seaports, train stations, Shinkansen lines and highways. These networks will play an increasingly important role in putting Fukuoka in close proximity with its domestic and international economic partners, especially countries in Asia.

The Port of Hakata is the only international trade port west of Port of Kobe and has access to long distance ocean liner container routes to North America and Europe. It is also in close proximity to the fast developing region of East Asia. In recent years, there has been a sharp increase in the handling of international seaborne containers and with the growing demands for international exchange, the Port of Hakata is set to play an important role in contributing to the growth of the city's economic activities.

Fukuoka City has an extensive and effective transportation network via the airports, ports, train stations and highways. Subway and bus services within Fukuoka are highly developed, catering to the local needs as well as that of tourists and business travellers.

The International Airport is connected to the city center at Hakata Station via subway on a 5 minutes route and 11 minutes route to city's down town: Tenjin (Chuo Ku).

From 2011, the busy Hakata JR Station is linked to Kagoshima after the Kagoshima Route opened its entire Shinkansen line, making it even more accessible to the rest of japan.

The relatively short travelling time is crucial in aiding the activities of economical and businesses exchange between Fukuoka and the major cities of Japan.

Future Planning:
Fukuoka City is committed in developing its transportation network. The current Nanakuma subway line which ends at Tenjin Minami is expected to be extended to link Canal City: Another major shopping and Hotel Hub area, Hakata Station. The project is likely to be completed around 2020.

Fukuoka City's Mayor Sochiro Takashima has always been a strong advocator in his support for developing Fukuoka, to attract foreign investors and businesses and to help startups to support its increasing population.

Fukuoka Mayor Soichiro Takashima told a press conference that the city would like to attract businesses and help startups to support its increasing population.

Greetings Message from the Mayor:

"Since ancient times, Fukuoka City has established a close relationship with the Asian continent and has developed through its open-mindedness and its active incorporation of cultures from abroad. Along with our excellent urban facilities including our convenient accessibility to the rest of Asia, I believe that these characteristics are the root of our pride in Fukuoka. 

As part of our new challenging spirit, allow me to aim high and declare that Fukuoka will play a leading role in Asia. While I place importance on exchanges with the rest of Asia, I would like to work together with you in developing Fukuoka as one of the leading cities in Asia where people are able to enjoy our environmental-friendly urban facilities. Your support and guidance would be greatly appreciated." (Sources from: http://www.city.fukuoka.lg.jp/english)

The Invest Fukuoka Initiative

More than just words, in accordance with government support, the Fukuoka Foreign Investment Promotion Center was opened in November 2002. It is structured to provide valuable one-stop services to overseas companies planning to invest and expand their business operations in Fukuoka Prefecture. In addition to local office, Fukuoka Prefecture has opened representative offices in overseas cities as well, all in a bid to promote investments in Fukuoka.

The below chart shows the average vacancy rates of Office Buildings from Year 2008 to 2012 in major Japanese cities and Fukuoka City's vacancy rate has been steadily decreasing, signifying an increased demand for its office spaces.

In terms of supply of New Office Buildings, from Year 2008 to 2012, the below chart indicated that few Office Buildings have been constructed in Fukuoka since 2010 when compared with other major Japan cities.

The combination of increased demand and limited new supply creates a good environment of investment opportunities in the real estate market of Fukuoka.

As of May 2013, the Yen has fallen more than 20% against the dollar from middle of November through May amid expectations of expanded monetary and fiscal stimulus under Prime Minister, Shinzo Abe.

Bank of Japan Governor, Haruhiko Kuroda, announced Japan's the latest and largest monetary stimulus package April 2013, aimed at spurring economic growth and to end Japan's decades of deflation and to target an inflation of 2% by 2015. The budget of USD1.4 trillion (Approx. 10% of Japan's Annual GDP) under this asset buying program is expected to double the monetary base to 270 trillion yen in two years.

The Program would also purchase longer-term government bonds to drive down long-term interest rate so as to encourage companies and people to borrow and invest in businesses or real estate.

The Program also included the buying of non-government assets and riskier assets such as ETFs, to push money into the Stock market, to support and increase the value of assets which will give companies an incentive to spend and invest.

Japan's Prime Minister, Shinzo Abe, under his "Abenomics" Plan: A combination of big government spending as well as an aggressive central bank asset buying program, signals a clear push in the direction of reviving and driving Japan's growth.

Having said that, although such policies will have a direct effect of weakening the value of Yen, Japan is at the same time careful to not come under the scrutiny of G7 on accusations of currency manipulation with undesirable effects on the competing exporting countries.

(Sources from: www.bloomberg.com)

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