- Mitsubishi Estate plans to open a new high-end outlet in 2018
- Overseas visitors to its malls surge more than 80 percent
Chinese tourists buying million-yen watches and luxury brands helped boost sales at Japanese premium outlet malls owned by Mitsubishi Estate Co. to a record last year, as a weaker currency led to a surge in bargain-hunting visitors.
Premium outlet sales jumped by more than 10 percent to between 300 billion ($2.6 billion) and 350 billion in 2015, Yutaka Tajima, a senior executive officer at Mitsubishi Estate, said in an interview in Tokyo Monday. He is targeting higher sales this year, he said.
The tourism boom is helping Japan’s largest developer by market value navigate slowing consumption as the nation’s population drops. Overseas tourists visiting the company’s nine high-end outlets rose more than 80 percent to 1.17 million in the first nine months of 2015, Tajima said. For the first time in 45 years the number of visitors to Japan overtook people traveling abroad last year.
“We benefited from a big increase in inbound tourists from China last year,” Tajima said. “More people are looking for high-quality goods, rather than just cheap products. Japan’s population is shrinking and consumption is flatlining, so tourists are very important for us.”
Japan’s population shrank in the past seven years to 126.9 million in 2015, the smallest since 2000, according to estimates by the U.S. Census Bureau. It is set to decline by more than 700,000 a year on average between 2020 and 2030, according to the National Institute of Population and Social Security Research.
Mitsubishi Estate is setting up currency exchanges in its facilities, helping tenants train staff in different languages, adding prayer rooms and making maps of tax-free shops to help overseas visitors navigate around shopping centers, Tajima said.
Gotenba mall, near the foot of Mount Fuji 90 minutes by bus from Tokyo, is the largest and most popular with foreigners, whose purchases topped 20 percent of overall sales there last year, he said. The outlet has 210 stores and includes brands from Gucci to Ralph Lauren.
“It’s become part of a sightseeing course for overseas visitors,” he said.
Seiko Holdings Corp. is one of the companies benefiting from the influx of shoppers, Tajima said. The Tokyo-based manufacturer of the luxury Grand Seiko brand predicts sales of timepieces will help boost overall sales 3.9 percent to 305 billion yen in the fiscal year ending March 31.
“We have a lot of regular Seiko models in outlets, but high-end watches from a few hundred thousand yen to one million yen are popular in outlets as well as Ginza, shops and department stores,” said Tajima.
Spending by the average Chinese tourist was 283,842 yen last year, the most of visitors from any country, and 23 percent more than Australians, the second-biggest spenders, according to the Japan Tourism Agency. The yuan gained 33 percent to 18.5 against the yen in the three years to the end of 2015, according to data compiled by Bloomberg.
Mitsubishi Estate will open a 10th premium outlet mall in Hanazono, Saitama prefecture, to the northwest of Tokyo, in 2018, Tajima said.
Mitsubishi Estate shares fell 5.2 percent to 2,135 yen at the close of Tokyo trading Tuesday. They have dropped 15 percent this year, a similar decline to the Nikkei 225 Stock Average.
Mitsubishi Estate owns the premium malls through a joint venture with Simon Property Group Inc., the largest U.S. mall owner.