Everyone knows now the Toranomon Hills complex and also Mori’s plans for developing the Toranomon area.
Years ago I had a client that I showed some Toranomon Hills units that were available for purchase from Mori in 2014. The client was living overseas and didn’t know Tokyo as well as I do but they came and visited the building.
The surrounding area still was only a flat, concrete space with nothing special around it. The Toranomon Hills area redevelopment plan hadn’t been made public yet however those in the industry knew what was coming. The specifics were still foggy then but one thing was certain; Toranomon was right in the cross hairs for massive redevelopment.
At that time, Mori was selling units in Toranomon Hills for 3-4 million yen per square meter. Compared to other property in the Toranomon area, it was priced high. I explained that while prices seemed aggressive, regardless of entry point pricing, there was a very high chance that values will rise when the surrounding area starts to be redeveloped.
The client passed on the opportunity to purchase this Toranomon Hills unit in 2014. The client believed that I believed what I was saying, however the client didn’t have the confidence in Mori’s ability to be able to pull off the project I was describing.
On April 13th, 2016, Mori CEO Shingo Tsuji announced the company’s specific plans for redeveloping the Toranomon area. Plans include a 36 story office tower, another 56 story residential tower, and a third new high rise that is set to be opened on top of a new subway station on Tokyo Metro’s Hibiya Line.
Today, units in Toranomon Hills are trading at prices well above ¥4 million per square meter with these price rises showing no sign of stopping. The more Mori develops, the more valuable these properties will become.
I recently spoke with my client who was in Tokyo looking at more property. I took the client around the Toranomon area to show what it has become thus far. After seeing the progress done to date, the client looked at me, laughed and said “I should’ve bought back then. This is the one that got away I think.”
Moral of the story; it is an agent’s job to alleviate a buyer’s skepticism however if one is too skeptical and hesitant, then one will lose out on a lot of opportunity. The fact that Mori was able to build Toranomon Hills at all given the vast amount of roadway and infrastructure changes that needed to be done to the area should have given enough proof they could finish the rest of the redevelopment as planned.
Editor’s Note: Shirley is the Sales Director for Housing Japan. She has sold billions of yen of real estate and arguably has the highest client satisfaction ratings in the industry. Shirley writes a weekly column for Housing Japan readers to help illustrate common challenges buyers and sellers have when trading Tokyo residential property.