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Japan's Property Market Comes Back to Life

Japan’s property market comes back to life
Gundam at DiverCity
Gundam at DiverCityPhotograph by Koji Sasahara/AP Photo

Move over, Mickey and Minnie: On Odaiba, a man-made island in Tokyo Bay, a 59-foot-high statue of the robot Gundam threatens to usurp the Disney couple’s role as the most popular cartoon hosts in the Japanese capital. Gundam, an anime TV and movie character, is the star at DiverCity Tokyo Plaza, a 2.2 million-square-foot complex that’s become the city’s hottest shopping area since it opened in April, with stores including Coach, H&M, and Zara. More than 4 million people flocked to DiverCity in its first two months. The complex’s developer, Mitsui Fudosan, expects 25 million visitors a year, the same number that went to Tokyo Disneyland and DisneySea combined last year.

Successes like DiverCity are giving investors confidence that the post-financial-crisis slump in Japanese real estate is turning around. “The recovery trend in land prices has become clearer,” Mitsui Fudosan President Masanobu Komoda told reporters in September. DiverCity has lifted the stock price of Mitsui Fudosan, Japan’s biggest developer by sales, 53 percent this year, compared with an 11 percent gain for the benchmark Nikkei 225 index. The company announced Nov. 2 that profit for the first half of its fiscal year had increased 62 percent, to 26.9 billion yen ($328 million), thanks to DiverCity and another Tokyo Bay-area shopping complex, Mitsui Outlet Park Kisarazu. (The second complex has no giant robot.) The company’s residential business was strong, too, earning 6.8 billion yen compared with a loss of 790 million yen during the same period a year earlier.