Is Co-Working & Co-Living Japan’s “Next Big Thing”?

Japan Properties

20 Aug, 2018 –

Living, cooking and saving together

While share-houses have existed in Japan for many years, and have been quite popular particularly since the 1990’s, their character is changing fast. While in the past these residences were known as “Gaijin houses” (foreigner houses), and hosted mostly foreigners who were short on cash and had no access to guarantors, who are required for most normal property rentals – these days more than half of the residents are actually Japanese. And while, in the past, the only Japanese who lived in these homes were those who wanted to study English or otherwise associate with foreigners, there are now all types of homes which fall under the “share house” category in most bigger cities in the country, local Japanese web portals where companies running these residential operations advertise their living spaces, and even themed guest houses to suit all tastes, focused around common interests, such as art, design, music and even love of animals.

The main advantages, aside from the obvious mingling opportunities, are cost and location. While a central Tokyo apartment for a single or couple can cost the same as a private room in a share-house – the move-in fees, which can often come up to several months of rent for normal properties, are far cheaper – and there are less securities required. This suits mainly younger people, in their twenties and thirties, who are wary of committing to a rental lease and are reluctant to spend thousands of dollars (hundreds of thousands of yens), without being able to afford living where they really want or need to, often compromising on long commutes and less than desirable suburbs in the process. Many Japanese who have studied or lived abroad find themselves stranded upon their return to Japan, while looking for a new job and having depleted their cash reserves – and having most likely already experienced co-living while overseas, often with foreigners as well, these arrangements suit them perfectly.

Last but not least, while Japanese apartments are notoriously small, often with just enough room to place a sleeping mat and some clothes in, these larger homes often have gardens or back/front years, large entertainment areas, and far better equipped kitchens – and so, those who do not mind sharing the common areas with other, hopefully like-minded individuals, can enjoy a far more spacious living space.

From an investment perspective, these homes can generate far higher income than standard tenancy arrangements, and with the growing popularity of the co-living theme, there are now plenty of companies operating such spaces on behalf of investors and owners, making this a viable, relatively hassle-free property investment for owners as well.

Creative, affordable co-working office spaces

While Japan has been long lagging in its start-up & entrepreneurial spirit compared with other countries around the world, the last decade has seen a rapid disintegration of the unwritten “lifelong employment” contract between Japanese companies and their employees – which has long been the staple of the risk-averse Japanese psyche. As companies struggle with lack of efficiency, and are forced to let long time employees go, the Japanese have become more accustomed and willing to take bigger leaps of faith, resulting in a budding start-up atmosphere that, while not quite gripping the country by storm, is certainly taking shape, and is accelerating quite quickly across the country – with the two main locations for would-be entrepreneurs being Tokyo and Fukuoka cities, on opposite sides of the country. While Tokyo boasts huge international appeal and plenty of opportunities to connect with like-minded business-folks from all walks of life, Fukuoka, which enjoys a lower cost of living and advanced governance, is a close contender for the “start-up capital” crown. Of the two, Tokyo has a larger number of co-working spaces and “hot-desk” offices, while Fukuoka is becoming more famous internationally, and also has better support – being the only place in Japan that has instated special “entrepreneur visas” for foreigners who wish to try and set up a business in the city – enabling them to bypass required bureaucracy for up to six months – and also offers a number of government programs offering to provide mentorship, advice and locations for both local and foreign business owners who wish to make their idea a reality.

There are now hundreds of co-working spaces all around the country, of various styles, sizes and in many more or less central locations – as well as an ever- increasing presence of angel investors and business incubators active in the Japanese start-up market – and the more daring Japanese out there are taking notice of this expanding infrastructure, and forego standard employment in a large Japanese firm in lieu of taking a shot at their dream. And while both Fukuoka and Tokyo are still a far cry from the hub and hum of Silicone valley or Tel-Aviv, compared to the typical Japanese working environment of the past, something has definitely begun to stir in this regard here as well. And in this space, as well, there are plenty of management companies ready to facilitate their services in leasing, maintaining and managing those assets on behalf of investors, who are already capitalizing on this prominent trend.

(Source – Ziv Nakajima-Magen, Nippon Tradings International”, Pic – Japan Properties / “Ziv Nakajima-Magen“)

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