A group of investors from Hong Kong will fly to Tokyo in August for an unforgettable shopping spree: a hunt for real estate bargains fueled by the historic weakness of the yen, the unwavering policies of the Bank of Japan and sushi at $440 per person.
The tour, organized by Hong Kong-based real estate brokerage JP Invest, follows a flurry of inquiries about Tokyo real estate from hedge funds and ultra-wealthy clients keen to exploit the fall. sharp drop in the yen to its lowest level in 24 years.
Among the souvenirs bought by business and institutional customers on a tour of Tokyo this year – just as the yen hit a 20-year low against the US dollar – was a luxury car dealership in the uptown Azabu-Juban, known for selling vintage Porsches for around $600,000.
The tour cost of HK$128,000 (US$16,300) per person includes stays at the Aman Hotel in Tokyo’s Otemachi business district and the traditional Gora Kadan onsen in the southern hot spring town of Hakone -west of the city, as well as a seven-day hotel quarantine package in Hong Kong on return. Meals include a reservation at Sushi Yoshitake, the 13-seat, three-star Michelin restaurant in Ginza that specializes in abalone in a sauce made from its own liver.
Elite tour participants, who will shuttle around Japan’s capital in a chauffeur-driven Bentley and a helicopter, are expected to focus on post-pandemic picks in Tokyo’s property market. Cash-strapped hotels built or renovated before the Olympics without tourists that have sat largely empty for more than two years should be of particular interest, analysts said.
“Hong Kong-based real estate funds and private equity expect a recovery in Japan’s inbound tourism story and therefore see it as a good opportunity to buy hotels,” said Japanese real estate analyst Sachiko Okada. at Goldman Sachs. “They can now come to Japan to view the properties to decide whether to invest or not. The interest rate is low, so it is easy to invest.
Kelvin Chung, director of JP Invest, said the agency responds to about eight to 10 inquiries a day and held the first such tour in May to meet growing demand from wealthy investors to visit Japan. after the country eased entry restrictions in April.
Customers are often interested in buying outlets in Tokyo, Chung said, adding that on average, each customer or family has spent HK$3 million to 10 million on investments in Tokyo.
Real estate brokers said that as well as highlighting the allure of the weak yen, the visits highlighted how the Tokyo market seemed sheltered from the recessionary worries swirling around other capitals.
Part of that, analysts say, stems from the ultra-low interest rates offered to investors in Japan, with the central bank firmly resisting pressure to follow its counterparts in Europe and the United States in tightening policy.
Jennifer Chan, a private banker in her 30s who also makes real estate investments in Hong Kong and the UK, is expected to join the trip in August. She said that in addition to wanting to buy outlets in Tokyo’s main districts, she was looking forward to the vacation element of a high-end package tour after two years of not being able to take leisure trips.
“I plan to deploy more of my capital in Japan over the next few years and hope to buy land to build my own properties. Now seems like the right time as price levels are expected to rise after reopening international borders,” she said, adding that the lower dollar-to-yen exchange rate meant that Japanese property felt like it was available at 20 for 30 percent off the same period last year.
Additional reporting by Riko Otsuka in Tokyo