Big in Japan
Japan’s slopes offer the best skiing in Asia, and there are plenty of opportunities to invest in the country’s increasingly sophisticated resort towns, says Helen Dalley
"Buying property in Japan is relatively straightforward: the National Australia Bank and the Commonwealth Bank of Australia will lend to prospective Japan investors anywhere they have a presence, including Hong Kong"
It’s surprising that Japan’s ski runs haven’t fallen victim to the overcrowding found in so many western resorts, particularly as the prime piste regions in Japan – including those found in the prefectures of Nagano, Gifu, and Toyama - not only offer stellar snow and slopes but are also relatively close to Tokyo. The upscale resort of Karuizawa in Nagano - nicknamed ‘Japan’s Aspen’ - is less than an hour-and-a-half away on the shinkansen (bullet train) from the capital, for example.
Further north on the island of Hokkaido (just a four-and-a-half hour flight from Hong Kong), the skiing conditions are even better and the soft, powdery snow that blows across from Siberia is recognised as some of the best in the world. With an average of 15 metres of powder each year, Hokkaido receives six metres more snow than Canada’s Whistler and 12 metres more than the ski fields of Australia and New Zealand. The resort town of Niseko is the most developed and famed for its après ski, but Furano - renowned for its virgin powder - and Kamikawa, which has a good selection of beginner slopes, are also popular.
Boasting the most sophisticated infrastructure in Hokkaido and a high concentration of foreign-owned bars and restaurants, it’s no wonder that many property developers are flocking to Niseko. Investors in this ski town include Hong Kong’s Pacific Century Premium Developments, which is busy developing the Hanazono district into an inclusive hub comprising top-notch accommodation as well as restaurants and shopping.
Boasting 300 days of sun a year and an average annual temperature of 26°C, Sanya is a popular and easily accessible holiday destination with those living in Hong Kong and the southern Chinese provinces, but it also attracts Russians, Koreans, Taiwanese and Japanese holiday makers in search of sun, sand and sea. Thanks to its tropical climate - it shares the same latitude as Hawaii - Sanya attracts visitors year-round, but is particularly busy from the months of October to May.
Another high-end development in Niseko is being built by Hong Kong-based firm Above + Beyond, which claims it is creating the first ‘super-luxe’ all-season resort and residential development in the region. These sophisticated hotel and residential units won’t be complete until November 2010 but they are already on the market, and you can snap one up with just a 20 percent deposit. Executive Director of the company and former Director at Colliers, Ginn Lai says, “To date we’ve already sold 15 percent of our inventory, and we are generating a lot of interest from investment bankers, and professionals from the IT trade, legal profession and media industry. Hong Kong expats account for about 70 percent of our customers. Many are keen skiers with young children who don’t want to travel all the way to the slopes of Europe or North America with their kids.”
The 102 one-, two- and three-bedroom hotel units - all fully furnished - range in price from HK$3.2 million for a 602 square-foot, one-bedroom unit to HK$13.9 million for a 1,937 square-foot, three-bedroom unit, with buyers entitled to four weeks’ stay at their property each year. “The properties form a rental pool, so even if your residential unit is never rented out, we take the area of your unit as a percentage of the hotel area to give you a share of the hotel revenues,” Lai explains.
In addition to Above + Beyond’s hotel properties, there are 22 four-bedroom, 3,444 square-foot residential chalets, which provide owners with the option to rent out via the management company. “Prices for these start at around HK$19.3 million,” confirms Lai, who adds that expected returns on both developments will reach up to 4.5 percent in the first year. “We’re projecting 4.5 percent to 5 percent after that, and by the fifth year 5.5 percent to 6.5 percent.” The healthy yields, he says, are partly due to the resort’s first-class facilities such as a 24-hour cocktail and cigar lounge and deluxe spa, and hotel-standard concierge and housekeeping services.
Over the next couple of years, many similar properties are coming online to bring a more sophisticated dimension to the Niseko mountainside, notably four developments managed by Niseko Alpine Developments (NISADE): The Vale Niseko, Setsumon, The Freshwater and Niseko Taisetsu. Nisade’s Chairman Jonathan Martin says, “We are directly targeting Hong Kong, Shanghai and the domestic market, which has largely been ignored to date. Within the Vale project, prices start from HK$1.54 million for a 322 square-foot apartment that operates as a hotel room. Taisetsu prices start from HK$1.54 million for a 462 square-foot, one-bedroom place. Indicative returns will be about a net 4 percent yield per annum.”
Another Niseko investment opportunity is presented with the arrival of 150 luxe residences from the Capella Hotel Group, headed up by former Ritz Carlton President Horst Schulze, which are set to open by Winter 2010. Situated just two minutes from the slopes of Annupuri, this development will consist of well-appointed townhouses, villas and condominiums. According to Mandy Wong at Jones Lang LaSalle, who is dealing with Hong Kong sales, “Investors are guaranteed a gross yield of 6 percent for apartments and townhouses.”
If you’d rather Honshu to the more northerly Hokkaido Island - being closer to Tokyo, you can extend your annual skiing holiday with a dynamic city break - then there are several areas worth considering, although most ski investment properties are admittedly found in Hokkaido.
The upscale town of Karuizawa located in the Gunma prefecture is one such option, as not only does it boast good snow, it also has a chic shopping area and its own shinkansen station. A four-bedroom, 2,142 square-foot property will set you back around HK$4.4 million, but trendy Tokyoites looking for some hot skiing/shopping action over a long weekend may help to cover your mortgage costs.
Another good investment bet is the Nagano prefecture and for a place in Hakuba - the Happone resort based here hosted the downhill race at the Nagano Winter Olympics in 1998 - you can expect to pay around HK$2.8 million for a 904 square-foot property.
Buying property in Japan is relatively straightforward, and Lai says that the National Australia Bank and the Commonwealth Bank of Australia will lend to prospective Japan investors anywhere that they have a presence, including Hong Kong. “They’ll lend up to 80 percent for 25 years,” he confirms, adding that this is the first time any bank has provided mortgage financing to foreigners wanting to buy property in Japan.
As an added bonus you don’t have to worry about renting your piste-side property over the summer months - there are plenty of activities to occupy tourists in Japan’s skiing towns, such as canoeing and hiking, or simply soaking in the hot springs. “There are also four 18-hole world-class golf courses in Niseko, which is something we plan to promote during summer months,” points out Above + Beyond’s Sales Manager Melanie Brown. Nagano, meanwhile, is famed for its beautiful lakes, and over 20 percent of the province is designated as a National Park.
Just be aware, however, that when the recreational options are this good, it may be tricky for you and your guests to remove yourselves from the mountain.
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