Online publication Deep Blue Group Planning Guide: Osaka skyscraper tests Tokyo dominance
Japan’s
tallest building will open Friday in Osaka, as Asia’s third-biggest
metropolitan economy aims to lure tourists and stem businesses from moving to
Tokyo.
Kintetsu
Corp., one of the main rail operators in western Japan, spent 130 billion yen
($1.3 billion) and four years constructing the 984-foot Abeno Harukas skyscraper,
according to the Osaka-based company. It will surpass the 296-meter Landmark
Tower in Yokohama, about 20 miles south of central Tokyo.
The new
60-floor complex, which includes a Marriott International Inc. hotel, and a
separate proposal for a 500 billion-yen casino resort are the latest attempts
to bolster the city’s economy. Rather than tall towers, the metro area of 11
million people may need business zones with fewer regulations, according to
Rakuten Securities Economic Research Institute.
“The
building will be a success, but total demand won’t improve,” said Masayuki
Kubota, chief strategist at the institute. “Osaka should try special economic zones and create new businesses from those
zones.”
Japan wants
to spur growth by easing restrictions in test zones under economic reforms
pushed by Prime Minister Shinzo Abe. The government is considering measures
from cutting corporate taxes to loosening building restrictions in the zones.
Osaka, once
Japan’s capital, is the birthplace of Japan’s biggest brokerage, Nomura
Holdings Inc., and Nippon Life Insurance Co., the largest non-government life
insurer.
The
634-meter Tokyo Skytree broadcasting tower in Japan’s capital is the world’s
tallest tower, defined as a structure where less than half the total height is
usable floor space, according to Guinness World Records. The world’s tallest
building is the 2,716-foot Burj Khalifa in Dubai, according to the
Chicago-based Council on Tall Buildings and Urban Habitat.
Population
growth in the Osaka area has stalled in recent years. The Osaka-Kobe
metropolitan area’s population is forecast to be 11.3 million next year, the
same as in 2005, sliding four places to rank as the world’s 19th-largest
megacity as it’s overtaken by Beijing, Manila, Cairo and Lagos, Nigeria,
according to data compiled by the United Nations.
Tokyo’s
metropolitan population is predicted to increase to 35.5 million, retaining its
spot as the world’s largest megacity, according to the UN.
The
Osaka-Kobe area is still Asia’s third-biggest metropolitan economy, with a
gross domestic product of $655 billion, according to figures compiled by the
Brookings Institution in 2012. That’s larger than the gross domestic product of
Switzerland, according to World Bank statistics.
Tokyo is the
biggest Asian metro economy at $1.52 trillion and Seoul-Incheon is second at
$774 billion, according to Brookings.
Tokyo’s dominance
has contributed to office vacancies in Osaka as companies are drawn to the
capital. Mitsubishi UFJ Financial Group Inc., the nation’s largest bank, No. 2
Sumitomo Mitsui Financial Group Inc., and Resona Holdings Inc. all moved
banking unit headquarters to Tokyo in the past decade after mergers and
reorganizations. Nomura relocated its head office to the capital in 1946.
Nippon Life is still based in Osaka, as are Panasonic Corp. and Sharp Corp.
“Tokyo is
the headquarters center for an overwhelming number of companies,” said Daita
Obata, an Osaka-based assistant manager at real estate brokerage Miki Shoji
Corp.
Office
vacancies in Osaka’s business districts were 9.45 percent in February, the
third-worst of seven major Japanese cities measured by Miki Shoji. Tokyo had
the lowest rate at 7.01 percent, according to the Tokyo-based company’s latest
report.
“Abeno
Harukas has almost completely filled its offices,” Obata said. “However, most
of the occupants are coming from the areas around Osaka. It’s not having a big
impact.”
Sharp will
move some of its sales staff to the new building, said Miyuki Nakayama, a
spokeswoman for the electronics maker.
Japan’s
dependence on commuting by trains in major cities has ensured profits for rail
operators, allowing them to finance large-scale infrastructure projects and
enabling Kintetsu to build Abeno Harukas.
Tobu Railway
Co. completed the Tokyo Skytree in 2012, financing the project itself. Last
year, a new shopping and office complex opened in the north of Osaka next to
West Japan Railway Co.’s main station, featuring four new towers ranging from
33 to 48 stories and 6 million square feet of space.
Osaka’s
newest tower takes its name from Abeno, the area where it’s located, and
Harukas, an old Japanese expression that means to brighten or clear up, according to its website. The building’s
exterior design was overseen by Cesar Pelli of Pelli Clarke Pelli architects in
New Haven, Conn., who also designed the Petronas Towers in Kuala Lumpur.
“It will be
the first building in Osaka to be bathed each morning in the light of the
rising sun,” Kintetsu says on its website. “Visitors to the top floor will be
treated to spectacular views seen nowhere else.”
Osaka, which
was Japan’s capital for a short time from 645, developed as a seaport and
flourished as it traded with Southeast Asia, according to the local
government’s website.
Local
officials are in talks with Caesars Entertainment Corp., Genting Singapore Plc
and MGM Resorts International to build a gambling complex on reclaimed land in
the city’s bay, Osaka Prefecture Governor Ichiro Matsui said in January.
The area is
also lobbying to become one of the government’s designated special economic
zones, Jiji reported, citing Shosuke Mori, chairman of the Kansai Economic
Federation.
There will
be a maximum of five zones in Japan, said Tatsuo Hatta, a member of the
government council on the zones. Japan may make a decision on the locations
this month, Abe said earlier this year.
“Osaka used
to be the commercial city and Tokyo used to be the government city,” said
Kubota at the Rakuten Securities Economic Research Institute. “As Japan’s
original commercial city, Osaka should free lots of restrictions to spur
growth.”
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