Mori Building Co., Japan’s biggest closely held developer by sales, and LVMH Moet Hennessy Louis Vuitton SA, the world’s largest luxury-goods maker, are part of a group that will develop a retail and office complex in Tokyo as they anticipate increasing consumer spending.
The two companies along with Sumitomo Corp. and J. Front Retailing Co. will spend 83 billion yen ($799 million) on a 13-story building with six underground levels in Ginza, said Shingo Tsuji, president of Mori Building, at a press conference today in Tokyo. Construction of the commercial facility, with about 147,600 square meters (1.6 million square feet) of floor area, will start this month and be completed by November 2016, the companies said in a statement.
Japanese developers are starting projects ahead of the 2020 Olympic Games as expectations of higher consumer spending and stronger demand for office space push up land prices in major cities. The price of land in the Ginza shopping district, where Japan’s most expensive commercial property is found, rose 9.6 percent in 2013 to 29.6 million yen per square meter, according to the land ministry.
“With the Olympic Games coming up, we must accelerate project development,” Mori Building’s Tsuji said, adding that the proportion of investment by the four companies hasn’t been finalized.
The recovery in land prices has attracted Paris-based LVMH to invest in the project, Yves Carcelle, a member of the LVMH Executive Committee, said at the press conference.
Ginza is “one of the key locations in the world,” Carcelle said. “The group acquired part of the building, which means not only commercial commitment, but really a financial commitment to the project.”