Takashi Nakazawa is the current head of International Relations at Japan Valuers based in Tokyo. 

With over 14 years experience as a property valuer, Nakazawa has worked in Myanmar, Laos, Cambodia, Malaysia, Hawaii and other areas across the Asia Pacific. 

His experience encompasses a wide variety of property valuations from residential to commercial, and his academic background in tourism planning and development makes him highly knowledgeable in the valuation of hotels, inns, resorts, retail and restaurants in tourist destinations. 

Since 2005, Nakazawa has been actively engaged in valuations for Australian Investor Challenger's portfolio over Japan and has also been a panel member of United Overseas Bank Singapore since 2013. He currently resides as a board member for the Japan Association of Real Estate Appraisers and Japan Association of Real Estate Counselors. 

REthink Tokyo spoke with Takashi Nakazawa about his experiences as a property valuer, and more specifically, Tokyo's property market.  

What are some of the defining moments in the Tokyo real estate/expat history?

My experience in the field of property valuation commenced with the time of so-called “fund-bubble” in the mid-2000s, followed by the global financial crisis in late 2000s. The event was named “Lehman Shock” by Japanese. I had been in charge of several investment portfolios by global investors where properties were located not only in Tokyo but nationwide. The crisis particularly brought the severest lending attitude, and valuers including myself had to represent for those investors to persuade lenders how the crisis condition will have been recovered in the longer time frame.

It was a very tough moment for me to looking forward the recovery in the near future, because I started my experience on the upside of the market, and it was my first experience facing such sudden paralysed market conditions. Some finance survived the shock and some did not. My senior appraisers at the time knew a lot about the loop of economy and the property market. But at this point in time, I had no idea.

The Great East Japan Earthquake and its aftermath in 2011 and 2012 also added a question mark to the “loop theory” of the market. As time went by, the property market began to hike again. 

Where are the key emerging markets/sectors that people should be looking to in Tokyo that you think will have upside?

During these five years, and particularly in these two to three years, the property market in Tokyo enjoyed heydays. The prices of Class-S office buildings in Otemachi; very scarce commercial development land in Ginza; and brand-new luxurious unit in a residential tower in the heart of Tokyo all experienced record-highs. Compression of investment yield is still strong so there would be some more rooms where the property values will have an upside but they will also be very limited under the circumstances.

With classic type investment assets shifting to new age infrastructure, hospitals and healthcare, tourism and Minpaku (AirBnB alike), and so forth, that opportunities are spread across the city and outside Greater Tokyo as well. 

Why did you first start working in the property industry?

At university, I was academically looking at the planning and management of tourist destinations. My goal was to be a consultant in this area. After graduating, I felt something was missing from my academic experience in order to achieve this. I found that what I needed to be successful were tangibles and particulars. The tangibles were real properties, and the particulars were valuations. It was at this point that I began studying for the national Certified Real Estate Appraiser exam which would make me a licensed valuer in Japan. 

What advice would you have for those looking to come into markets like Tokyo and set up business?

The legal base of Toyo and Japan is very strong which makes it a very safe place to invest. However, market transparency is lacking in comparison to other countries. As a real estate appraiser in Tokyo, my role as a real estate appraiser means I have the tools to interpret the voice of the property market for my clients. 

How do you best help your clients when buying/renting or selling/leasing a property?

My role is primarily advisory. I act as a decision making support system so that clients are not overwhelmed by the market. In addition to this, I assist with fair market valuing and market rent opinions. For my clients overseas, I also assist in providing them with knowledge of the real estate they are interested in, but also the heterogeneity of Japanese culture and history.

What would you like to see changed in the industry in 5 years?

I would like to see the great success of Tokyo Olympic Games and Paralympic Games 2020, as it will be an excellent opportunity to showcase Tokyo across the world. I think this will be a good way to introduce internationality and multiculturalism to Tokyo and Japan moving forward. Investors and visitors coming into Tokyo will continue to influence the market going forward. 

What are some key opportunities in the marketplace at the moment?

Tokyo property market is highly matured and big opportunities are not easily found. Nonetheless, just a minimal percentage of return for those high-end properties, say, over 100 million USD with 3% of net annual return is a big stable amount. The better and higher price property based on a fair view will maintain its value even in a bear market. But opportunities are set of threats and “who is holding the bags” is gradually becoming a big rumour recently.

What advice do you have for people looking to buy affordable residences in Tokyo?

In comparison to those affordable residences in foreign countries, Japanese studio flat is smaller than the standard in other countries. But on the other hand, quality, smartness, safeness, privacy, and legal consistency is much higher in comparison to international standards. My advice to young foreigners with a tight budget looking for affordable real estate in the heart of Tokyo is “find the place to sleep well. You can play outside!”

Where is demand currently coming from, where is the interest focused at the moment? i.e what sectors/wards have the strongest interest at the moment and where are the buyers based (Locals, Foreigners etc?)

In the investment market, there is a strong competition between local institutional and global investors. The global investors are not only from western countries but are also Asian institutional and high-net-worth-individuals (HNWIs). Decision-making processes by those HNWI are generally faster than the local giants, and thereby speed in the market seems to be faster than ever. Due to very limited supplies in the heart of Tokyo, deals are spread over the nation, and so as the asset-type in variety.

Where do you see the Tokyo Residential market in 5 years? 

In 5 years it will be interesting to see the impact of the Tokyo Olympic and Paralympic Games in 2020 on the market after the event. In a global context, Tokyo's residential properties are still cheaper than in Hong Kong or Singapore. Inbound tourist numbers are also still on upward trend. Currently, the market price is said to be in a moderate phase but some expect another hike in prices towards 2020. After the event, although I would not find the apparent risk of acute decline in the market, aging and depopulation of Japanese locals are long-standing risks moving into a 10-year outlook. The key to maintaining the market remains to be participation from overseas, and safer target areas are always at three central cities of Tokyo (i.e, Chiyoda, Chuo and Minato) where population even without overseas residents is expected to continue growing.

For more information about Japan Valuers or Tokyo's property market, email Takashi Nakazawa of Japan Valuers via the contact details listed below. 

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