Apple Inc. (AAPL) plans to open a store in Tokyo’s upscale Omotesando shopping district as early as March, adding its first outlet in the city in years as Japan’s economy recovers, according to a person familiar with the plan.
Construction is scheduled to be completed by February, the person said, asking not to be identified because they aren’t authorized to speak for Apple. The store would be Apple’s first opening in Tokyo since August 2005, according to the company’s website, which is advertising jobs for a new store in the city.
Takashi Takebayashi, a Tokyo-based spokesman for Apple, didn’t immediately return a telephone call seeking comment. The iPad-maker’s first store in Tokyo in almost a decade is under construction as Prime Minister Shinzo Abe unveils the third prong of his strategy to boost economic growth that has already included fiscal stimulus and monetary policy.
“For Apple, the Japanese market is appealing in terms of quantity and price,” said Satoru Kikuchi, an analyst at SMBC Nikko Securities Inc. “There is a room to expand tablet sales and a possibility the Japanese market expands if Apple’s mobile carrier partners increase.”
NTT DoCoMo Inc. (9437), Japan’s largest wireless carrier, would consider carrying the iPhone if it can limit the handset’s share of sales to less than 30 percent of the company’s total, Chief Financial Officer Kazuto Tsubouchi said Aug. 8. The Japanese carrier’s online store, called dmarket, offers music, videos and games and competes with Apple’s iTunes store.
Prime Minister Abe has promised to loosen business regulations and increase government support to help the country’s industry as part of the “third arrow” plan, following fiscal and monetary stimulus. Consumer prices rose in June, and the world’s third-biggest economy expanded at an annualized 2.6 percent in the three months through June 30.
The land costs about 16 billion yen ($164 million) and a completed store with Apple as tenant would value the property at around 25 billion yen, said Seth Sulkin, a representative director at Tokyo-based real estate and asset manager Pacifica Capital KK. Sulkin was Apple’s real estate adviser for all seven of the company’s previous stores in Japan.
“Apple wants the best real estate they can get,” said Sulkin. “They are particular about size and shape. If they have to wait to get the real estate, they would.”
Earlier this year, the iPhone maker moved its Tokyo headquarters to the Roppongi Hills complex from the Shinjuku neighborhood to take advantage of lower rents.
The architect responsible for the building identified on a construction sign at the site is Tokyo-based Jun Mitsui & Associates Inc. Architects. The same design group handled projects including De Beers Ginza Building and the New Haneda Airport International Terminal, according to the firm’s website.
Apple, based in Cupertino, California, plans to introduce a new phone at a Sept. 10 event, a person familiar with the matter has said, and the company promised “several more game changers” in the product pipeline as it tries to fend off Samsung Electronics Co. (005930) and Chinese makers selling cheaper handsets.
Apple rose 1.2 percent to $494.27 at 1:47 p.m. in New York. The stock had lost 8.2 percent this year through yesterday.
The building housing the new Tokyo store would have three levels, including two underground, and a total floor area of 20,109 square feet (1,868 square meters), according to the construction board posted on the site. The sign didn’t say how much space would be occupied by Apple. The site is near other luxury brand shops including Kering SA (KER)’s Gucci and Coach Inc.
Rents for prime retail space in Tokyo are the third-most expensive in Asia at $864 per square foot a year, according to CBRE Group Inc. Hong Kong, which has three Apple stores, charges the most retail rent at with $4,328 per square foot per year.