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In fiscal 2001, land prices in Japan continued their
decade-long decline. Well-located areas in Tokyo showed some signs
of either turnaround or upturn, but in outlying suburbs there
is no apparent relief from the downward trend. Plentiful supply
in the apartment market has not impeded a positive trend supported
by large-scale, well-located properties. New, large office buildings
with superior location, size, and plant and equipment attributes
are in short supply, and are a market that continues to be positive.
Well-located and inherent property values are causing disparity
and polarizing demand, a phenomenon that is expected to be a continuing
issue for apartments and offices.
Japanese real estate investment trusts (J-REITs) are mooted, and
real estate has become increasingly liquid through securitization.
Several real estate funds have already been established.
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In this prevailing environment, Kajima's energetic
pursuit of development business is focused primarily on redevelopment
contracts for large building projects, and large-scale residential
projects. In the case of the Daikanyama redevelopment (Daikanyama
Address, completed in August 2000), the Company built a 36-story
high-rise, high-value property of some 214 units, which were sold
out on the day of release. The Toyotama-Kita 6-chome redevelopment
(Dear Marks Capital Tower, completed in March 2001), involved
a 35-story high-rise building of some 290 units, all of which
were sold out on the day of release. These successful projects
were the result of the Company's ability to consolidate landowners,
formulate a project plan, and carry through an entire project
from construction to sales, and are evidence of high regard in
the marketplace for Kajima's technical expertise in development
and its level of credibility.
In October 2000, a new division, the Asset Management Division,
was established to provide consultancy services in due diligence
and property management and brokerage, and to manage the rental
of some 50 properties owned and managed by Kajima. In this latter
case, the division has maintained a very high occupancy rate,
of approximately 96%. The division also undertook due diligence
on 200 properties in fiscal 2001, worth in excess of 200
million, and is winning high regard in the market place for that
work.
Real estate can be expected to become increasingly liquid in the
future. The Company's divisions, particularly the Asset Management
Division, are therefore well placed to capitalize on Kajima's
development expertise both in Japan and overseas.
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