Savills Global Placement
Location: Tokyo, Japan
Dates: July 2015
Name: George Haworth
Graduate Scheme: Sociable Surveyors
George headed over to join the Tokyo team for a 2 week placement after winning the Savills Sociable Surveyors placement. George's blog is below, so do have a read to find out more about his experience and the Tokyo property market.
During the first day I was introduced to the rest of the members of the office, in particular those with whom I would be working most closely in the research and investment departments. After introductions Ben (Capital markets manager) took me for a coffee and outlined some of the key differences between the Japanese and UK markets. One particularly interesting feature was the prevalence of REIT's in Japanese property and the various structures that a deal can take.
Until lunch I buried myself in research reports trying to get a better understanding for the market drivers and dynamics specific to Tokyo and Japan ready to have a meeting with Nat, a macroeconomist working in the research department, who explained the influence of Abenomics on the Japanese property market. Fascinating.
Having spent Monday starting to get a grip on the Japanese and specifically Tokyo market it was time to put the knowledge into a more practical use and start working on the weekly deals circular to go out this week. This report has over 4500 readers and so ensuring the accuracy of information I was collating was key. One challenge I faced here which was indicative of the less transparent Japanese market was that there was no obligation of companies to report the transaction price or any details of it as well as no central database. The only exception to this was where REIT's were involved - they have to declare transaction details.
As my Jetlag subsided and familiarity my tasks became much more varied. My next challenge was to research and prepare questions to discuss with a senior Japanese politician covering inheritance tax, its recent changes and the way that it relates to property in Japan.
I worked with Ben profiling large investors in the Asia market and creating a database with their investment past and future criteria. This helped me to link wider Asia with what I had began learning about in the past few days about Japan but also showed some of the contrasts that it has with London. London attracts a large amount of foreign investment in both residential and commercial real estate however Japan is much, much more of a domestic market.
Later in the week I was treated to lunch at the American club with Jon, my first chance to really meet the man who's book had been a formative part of my introduction to the and had an interesting discussion of his experience of the Japanese property market and the influencing factors that I had learnt about earlier in the week such as Abernomics.
After lunch Ben and I did a walking tour of Ginza and Tokyo station where we got a hands on view of some of the assets that had traded recently. Getting a physical impression of the assets you have been learning about is always useful and to see in the daylight the sheer scale of development that Tokyo is composed of. The time with Ben also allowed me to pick his brains on land purchase etiquette in Japan, its very common for instance for deals to be planned many years in advance as developers slowly buy up enough plots of land to make their projects viable. During this phase developers are often trying to sweeten landlords with gifts, having their land swept etc. Despite this though sometimes an occupier wont move and as a result a development has an old house or premises encapsulated within it.
And just like that my first week was over, in a blur of introductions, meals and deals. I had met the office, got a taste for Tokyo and had a new favorite world city. My first impressions were that the Japanese are an intrinsically friendly race, with exquisite food and a rich culture. From a real estate perspective I had seen deals of a magnitude far greater than anything I had encountered before as well as becoming much more familiar with the way business in Japan is done.
At that start of my second week I started preparing to compile an asset summary for James in the investment team. This task required me to build on all the knowledge I had acquired on Tokyo and go into more depth about the sub market the building was located in. The first day of this task was spent looking at brochures James had previously created to get an impression for the tone, style and content that was required.
It wasn't just working on the brochure though, I was fortunate enough to join Jon and James for a meeting with fortress to discuss their interest in a portfolio. The meeting was a priceless and fascinating insight into what at least one large Japanese investor was looking for and how they assessed products. They were then kind enough to discuss, for my benefit, other markets in Japan and how regarded them an interesting example being Hiroshima. After the meeting Jon, James and I went for an exquisite lunch at the Oak door in the Hyatt and discussed the reaction of Fortress to the offer and the route Savills would take from here.
As I continued to develop the asset summary, now creating maps and access routes as well as completing a first draft report on the local submarket the asset was in, I had to balance my time with preparing for and attending more meetings. Whilst I was in Japan I took every available opportunity to get to a meeting and soak up the Japanese business culture, the exchange of cards when you meet someone new and the bow as you leave an office are two examples of customs I had previously never encountered. At a meeting with GIC in the week we again discussed market perceptions and views on the future of Japan as well as trends with REITs for the future. The contrasting opinions between institutions were particularly striking, as were their different investment criteria.
On Thursday I spent the morning working on the asset summary for James, adding the photos and facts that I had amassed over the weeks research. I then met with Jon for lunch. Jon had just been at a domestic exchange and talked me through the ins and outs of the process in addition to how it differed from an international exchange. These are things that back in the UK I would never be able to experience.
On my very last day James and I went for one last glorious lunch atop the Toranamon hills development. The views over Tokyo were spectacular, as was the food. My time in Tokyo had been an incredible experience, offering more than I could have ever dreamed for and for that I must thank Savills and Sociable Surveyors for making it all possible.