Table Speech

Office Buildings in Tokyo Undergoing Transformation

October 28, 2020

Mr. Yoshio Suzuki
CEO, Fujiya International Co., Ltd.

 The very first building of our company was completed in 1929 on the corner of the Toranomon intersection in the heart of Tokyo. Designed by an American architect William Merrell Vories whose masterpieces include Meiji Gakuin University and Kobe College; the building survived the deadly bombings of Tokyo during World War II and witnessed the post-War economic growth miracle. After the reconstruction, the second building opened its doors in 1967 to tenants including banks and organizations affiliated to ministries and agencies. The third building was just completed this July as part of the urban regeneration project focused on expanding and renovating the urban infrastructure such as the public transport network and stations. This new landmark building has tenants from both the public and private sectors, ranging from the Digital Agency Preparatory Office, IT businesses to foreign-affiliated firms.

 Tokyo is ranked the third most powerful city in the world, following London and New York, yet it must overcome its weaknesses in “accessibility” both in terms of “international transportation network” and “barrier-free services” as well as “support offered to startups”. Toranomon area was selected as one of the “National Strategic Special Zones” to spearhead redevelopment and make Tokyo the best city in the world by 2020, the year in which we were supposed to host the Olympic and Paralympic Games. The BRT (bus rapid transit) system was introduced and the Loop Road No. 2 is being expanded to become fully operational by 2022. There are 7 projects under way backed by the Japanese Real Estate Investment Trust (J-REIT) that had attracted sufficient investments until the outbreak of COVID-19 changed the whole picture. The Tokyo Stock Exchange REIT Index experienced a sharp decline as anxiety spread among investors with the pandemic potentially reshaping Japan’s property markets where remote-work has become the new normal and not the exception. Coworking and shared office spaces are also growing in popularity especially amid COVID-19 pandemic and is reshaping the office property market. Many companies have come to let their employees choose where they want to work and provide them with mobile devices. Now the downside is that companies can monitor and track the location of employees anytime, putting them under constant scrutiny.

 Today, real estate appraisal is based on land values combined with the status of cash flows including the attractiveness and competitiveness of REIT regimes. Another real estate benchmarking that overseas investors focus on is the green building certification systems such as LEED (Leadership in Energy and Environmental Design) and CASBEE (Comprehensive Assessment System for Built Environment Efficiency).

 Today, we are in the midst of a major transformation that will take tremendous courage, agility and flexibility to step out of our comfort zone and face new challenges. We must spearhead fundamental reform in diverse sectors, including transport infrastructure, communications, mass media, logistics, not to mention office buildings. We will strive to respond to the different needs of our clients and provide quality office buildings and spaces.

How to Make Buildings Withstand Earthquakes? – Seismic Isolation, Damping and Earthquake Resistance

October 28, 2020

Mr. Shinkichi Suzuki
President and CEO, Kawakin Holdings Co., Ltd.

 Just a year ago, we welcomed Prof. Hirata from the Earthquake Research Institute of Tokyo University, who highlighted how we could prepare for the Tokyo Inland Earthquake by applying seismic design and retrofitting buildings. Seismic design can be classified into three categories as follows. One is an earthquake resistant structure which provides strength against earthquakes to avoid fatal destruction in the event of a large-scale earthquake while buildings may sway considerably. The current Building Standard Act requires buildings not to collapse in major earthquakes, although some damage may be sustained. The second is a seismic isolation structure which places quake-absorbing devices (isolators) such as laminated rubber, lead rod and dampers between the ground and the structure to reduce the effect of ground motion on the structure. It changes strong and severe vibrations caused by earthquakes into slow vibrations so as to prevent the building itself from being damaged but also prevents furniture and equipment within the building from moving and falling over. The third is a damping structure which uses viscoelastic materials that have high energy absorption characteristics. Mass dampers are also used in some structures which sway with a different rhythm from the swing of the structure itself and suppresses the deformation of the structure.

 When we compare the total construction costs of seismic isolation and damping structures with that of earthquake resistant structures, the former becomes about 10% more expensive while the latter makes it about 5% more expensive. But the benefits of seismic isolation and damping structures should not be underestimated as their asset value increases considerably while they require minimum repair or reconstruction even when major earthquakes hit, making the expected seismic life-cycle costs relatively inexpensive.

 In 1981, the Building Standard Act was revised and introduced the earthquake-resistant building codes. The government has been making strenuous efforts to promote earthquake-proof retrofitting of buildings built before 1981. To date, 99% of public schools, 87% of houses and 75% of hospitals have become earthquake-resistant. The Ministry of Land, Infrastructure, Transport and Tourism aims to complete earthquake-proof retrofitting of all the large-scale buildings used by many people including hospitals, schools and department stores by 2025. To ensure business continuity in the event of a major earthquake, an increasing number of hospitals and factories are taking measures to prevent medical devises or production equipment from moving and being damaged by shaking. I cannot emphasize enough the importance of preparing for powerful earthquakes so that we can protect our lives and assets and maintain a safe and secure society.