What does “Tokyo Shitamachi” refer to?
When considering real estate investment in Japan, the metropolitan city of Tokyo is undoubtedly one of the highly recommended areas, however, due to the economic recovery from the recent Abenomics and the upcoming 2010 Tokyo Olympics, property prices in central Tokyo are soaring, making it “budgetarily difficult” – as some will say – to purchase real estate.
Regardless, with an estimated population exceeding 38 million people when considering the whole urban zone (that is, including Yokohama, Saitama, and Chiba), the capital has grown to be Japan’s largest city for the last 400 years with different characteristics in each city and area.
Which is why, this time, we will be focusing on the real estate market in the so-called 下町 “Shitamachi” Tokyo and its investment value.
Every city in the country has an area called Shitamachi, but if you look at its definition of being a “low-lying part of a city (usu. containing shops, factories, etc.), which part of Tokyo would come to mind according to this interpretation? Based on historical records, you may think of Asakusa and Fukagawa or perhaps, Nihonbashi, Kanda, and Kyobashi although, not many people would think that the current Nihonbashi and Kanda are part of the Shitamachi anymore.
There might be many people who picture the image of “working class” from this term and originally Shitamachi read and pointed to a geographically lower area as recalled by its etymology. In the Edo period, the hilly area where Daimyo residences were built was called “Yamanote”, and in the below area, shops and tenement houses inhabited by craftsmen started forming.
This characteristic is not limited to Japan only, but in the process of forming a city since ancient times, hilltops and hills have become areas where royalty and nobles live, whereas lower territories became the residence of the crowd. Before modern times, when sewerage technology was undeveloped, the lower area unavoidably had more disasters like floods for instance, which contributed to this segregation as life on the hills was considered safer.
What is the “investment value” of real estate in the Shitamachi area?
Fundamentally, the Shitamachi zone has a high investment value with appealing access to the downtown area essentially. It is extremely convenient especially near Marunouchi, the center of business, where JR and several other transportation lines are intersecting like mesh.
Additionally, with some exceptions, an area called Shitamachi is also located on the east side of Tokyo. Tokyo’s development called 西高東低 – seikoutoutei – focused only on the west side of Shibuya, Setagaya and Suginami Wards. However, in recent years, attention has been placed on the east side of Tokyo as well, due to good access to the Marunouchi area, etc., therefore development plans are also active.
Furthermore, in Japan where the declining birthrate and the aging population are accelerating, single women and the elderly are important targets as residents of future rental housing. Recently, there is a tendency to choose properties with an emphasis on actual convenience and low cost of living, etc. rather than the image and brand reputation of the city. In this respect, shitamachi is relatively cheap and is becoming more and more popular.
Progressive “re-development” plans in Tokyo Shitamachi
At present, redevelopment is in progress in various areas in Tokyo, increasing its attractiveness in the real estate market. For example, the city planning decided in 2018 and urban development in Nishi-Nippori, which aims to be completed in 2025, can be said to be a typical example. In addition, in the Shitamachi area, redevelopments aimed at improving disaster prevention are also in progress, and construction of high-rise buildings and renovation of the station are being carried out.
The construction of new commercial facilities and office buildings is thriving, further enhancing the convenience of living in downtown. The number of people gathering in the Shitamachi area will, therefore, grow in the near future, consequently increasing rental demand. In conclusion, considering these circumstances, wouldn’t the investment value of the Shitamachi area be extremely high?