2018.03.6 - All , FASHION ASPECT

Aspects being demanded of business facilities in the metropolitan area

Marketing Development Group

Chief

Hiroyuki Yoshioka

As the 2020 Tokyo Olympics draws near, a construction-rush of large scale facilities in the metropolitan area continues. Despite the soar in real estate/construction costs, even as we walk around town we can feel renovation projects steadily moving forward at Shibuya, Nihonbashi, Marunouchi ~ Otemachi, Toranomon and other areas, mainly by major developers such as TOKYU LAND CORPORATION, MITSUI FUDOSAN, MITSUBISHI ESTATE, MORI BUILDING. Including office buildings and residences, the metropolitan area is going through a dramatic change, which is why I would like to take this opportunity to rethink what roles are being asked of commercial facilities in the metropolitan area.

■Developments worth the size of 293 Tokyo Domes
by the year 2020

According to the findings of ‘NIKKEI ARCHITECTURE’ (published by Nikkei Business Publications, Inc.), there are presently over 300 projects with total floor space of over 10,000㎡ scheduled to be constructed within the 23 Wards of Tokyo, among which, the total floor space of the projects announced to be completed by the opening of the Tokyo Olympics in the year 2020, is approximately 13.7 million㎡, which amounts to 76 % of all projects underway.※1 This is difficult to picture, so to put it into perspective, this floor space is the same as 293 Tokyo Domes.

As can be seen in Table 1, major developments by the year 2020 by major developers alone are of quite a large scale. Most are composite facilities, including residences or hotels or store, but the largest ratio among the total floor space being that of offices, showing it holds a vital role in forming the value and image of the facility.

■Tendencies of latest metropolitan facilities,
seen in Tokyo Midtown Hibiya

In March 2018, Tokyo Midtown Hibiya will open, as the next large-scale facility following GINZA SIX. It is a composite facility of offices and businesses existing together, under the theme of “creation of new experiences and values with a futuristic outlook”. As one of the characteristics of the office floors, the establishment of ‘WORKINGSTYLE’, MITSUI FUDOSAN’s multi-base type share office, is worth mentioning. As we can see in the developments of the U.S. WeWork※2, a collaboration office which operates on a global scale, plans to open new offices in GINZA SIX and Shinbashi, following their new open in ARK HILLS (Akasaka/Roppongi) in February 2018, there is a new wave of office markets on a global scale. In midst of such a wave, this service of MITSUI FUDOSAN is already spread to 18 locations (as of January 30th, 2018), and future activities are gathering attention.

There is a rich array of food-related businesses in the business zone, with approximately 60% of the 60 tenants being restaurants & food stores, including attention gathering restaurants such as ‘HYOTEI’, the long established Japanese cuisine restaurant from Nanzenji, Kyoto, with a history of 400 years, and the landing of ‘Buvette’, a popular restaurant from N.Y. The remaining approximately 40% is items sales stores with over half being fashion-related (12 stores), among the lifestyle-related (10 stores), one worth mentioning is ‘HIBIYA CENTRAL MARKET’, a ”small town-like” arcade-style composite-shop run by Yurindo, under the direction of Creative Director, Mr. Takayuki Minami, known for creating many high-sensitivity select shops. This includes apparel stores, small goods stores, restaurants, barber, optician, book store, gallery, etc., which is an expression of Mr. Minami’s memories of ‘markets’, ‘city corners’, and ‘alleys’ he saw around the world, in an area of approximately 780㎡. Although there are only 4 service-related tenants, despite the lack of numbers, there is a special-feature. As a symbol of a town of entertainment, there is a cinema-complex (=composite movie theater, total 13 screens, 3,000 seats), priding itself to be one of the largest in the metropolitan area.

One of the characteristics of recent metropolitan facilities is that they have a strong tendency towards integral composition, with substantiation of offices with new functions and values, in business the strengthening of food-related establishments, in item sales limiting the number of stores and making sure to include new life-style-related tenants (on the other hand, reducing item sales of fashion, etc.), strengthening of non-item sales functions such as art and entertainment. The above-mentioned Tokyo Midtown Hibiya and GINZA SIX are no exceptions to this pattern.

Now-a-days, even if the location is good, it is difficult to make the facility attractive and valuable with composition of simple office rental and/or item sales tenants. Popular tenants cannot be gathered either. Furthermore because these are time in which attractiveness of a facility ≒ attractiveness of the town, a long-term vision from a urban development point of view is necessary.

■The key is, the realization of culture and exchange

For the last 10 years, The Mori Memorial Foundation, Institute for Urban Strategies, has been ranking the power index of 44 cities around the world, from the stand point that the so-called “magnetism” of cities which attracts attractive and creative people and corporations from around the world is the power index of that city. ※3 In the ranking of 2017, Tokyo was ranked 3rd following London and N.Y. (figure 1). Of the 6 evaluation criteria, Tokyo is weakest in culture/exchange (figure 2). Culture/exchange consists of 5 index groups, namely “power to transmit, cultural resource, facilities for attracting customers, environment for accepting foreigners, experience in accepting foreigners”, with each having further subdivisions of evaluation criteria. I’m not going into details here, but it is explained that Tokyo largely lacks in opportunities to encounter culture/history, cultural resource, environment for accepting foreigners, number of high-class hotel rooms. In metropolitan commercial facilities also, due to the background of it being “difficult for simply selling items”, the importance of being able to answer to “thing consumption” is being raised, and culture/exchange (=experience and/or community) is often exactly the method in which this problem is dealt with.

■Make full use of creativity to manage
both fun and profitability at the same time!

Metropolitan commercial facilities need to manage both fun (value of contents) and profitability at the same time, within limited space. Simply adding a museum shop to a museum, is neither new nor profitable. Due to the rise in construction costs, there exists the fact that the break-even point for every facility is rising also. To raise the value and profitability of a facility, it is necessary to over-lay contents with needs-wants within limited space. The provider side must offer items and/or services with cultural aspects such as food, art, travel, hobby, etc., meanwhile, the receiver side must be able to enjoy a variety of contents such as play, experience, learn, meet, buy, etc., and at the same time, a flow in the opposite direction must also be created. The key to realizing creation of new higher added value, is this sort of multi-directional exchange between the provider side and receiver side.

However, for facilities to develop/offer such services, there are no pre-existing contents packages, and each facility must create its own original contents putting into account both characteristics of the business area and target customers. Therefore, it is necessary to supersede conventional concepts of making a facility/sales floor. The above mentioned WeWork is not simply a share-office. By offering various support services to create new business through communities of users, they are amplifying their value.
In commercial facilities also, utilizing new overseas attempts and/or knowhow of diverse types of business, new services of starting-up businesses, etc., could prove to be effective methods. I’m looking forward to new, fresh commercial facilities/sales floors which are both fun and profitable being developed, by fully utilizing people’s creativity.

※1.In complexes which involve several buildings, completion is when all buildings are completed
※2.Co-working space, born in N.Y. First established in 2010 (first space in SOHO). In 2017, total numbers of members around the globe has exceeded 1 million people. A total of 140 locations are opened, in 23 cities in the U.S. and 44 cities of 15 countries around the world and is being called one the most high-value companies among those starting up in the U.S. (aggregate market value: 20 billion USD (approx. 2,260 billion JPY)). Corporate philosophy is “To Create a world where people work to make a life, not just a living”.
※3. Evaluation made under the 6-evaluation index of economy, research/development, culture/exchange, residence, environment, transportation/access.