Xymax Real Estate Institute

RESEARCH REPORT

Building Owner Survey 2019
Changes in the environment and business conditions of nationwide small
and medium-sized building owners

December 17, 2019

In partnership with the laboratory of Professor Yukio Komatsu of the Department of Architecture at Waseda
University (*1), Xymax Real Estate Institute (hereinafter, “Xymax REI”) has conducted questionnaire surveys ofowners of small and medium-sized buildings nationwide who lease out their buildings (*2).
In this fourth survey, we carried out questionnaire surveys and interviews on the current management stateof the building lease business, its outlook, and responses to changes in the environment surrounding thebuildings. This report is a summary of the results. In this report, the surveys in 2017 and 2018 are referred to as“Tokyo & Osaka (2017)” and “Government-designated Cities (2018),” respectively.
*1 Laboratory of Professor Yukio Komatsu, Department of Architecture, Waseda University: http://www.waseda.jp/sem-ykom/*2 “Building Owner Survey 2015–2018”: https://www.xymax.co.jp/english/news_research/?type=research

Key Findings
1. Attributes of building owners


Age: More than 60% of the business managers were 60 years old or older.

No. of buildings owned: 60% of the building owners owned one or two buildings; building age:
the age of 80% of the major buildings were 20 years old or older.

2. Condition of the building lease businessWith regard to changes in the number of buildings in possession, the percentage of “increased(will increase)” was approximately 10% both “over the past year” and “over the next year.” The
more buildings the operator owned, the higher was the percentage.



As for the business conditions of the overall building lease business, the percentage of operators
who replied that conditions were good “over the past year” was 49%, outstripping those who
replied that conditions will improve “over the next year” (26%).



As for income and items related to income, a majority of respondents (more than 65%) saw littlechange. In expenditure (expenses) and items related to expenditure, all items were set to rise in
the future, especially repair costs, which more than half of the operators expected to rise.

3. The future building lease business

Short-term (around three years) outlook: 34% were optimistic, outnumbering pessimistic views(20%).

Medium- to long-term (five to ten years) outlook: Pessimistic views increased to 41%,

outstripping optimistic views (15%).


Interest in future changes in social conditions: The top replies included, “decreases in the
population and the number of workers,” “rise in the need for aseismic measures,” and “workstylechanges,” in this order, with the percentage of “rise in the need for aseismic measures” farexceeding that in the previous survey.

Measures to improve the value of buildings: The top measures that were implemented were,“energy-saving of equipment,” “refurbishment of interior of common areas (e.g. entrance hall),”

Building Owner Survey 2019
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
Copyright © 2019 Xymax Real Estate Institute Corporation. All rights reserved.

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RESEARCH REPORT｜Xymax Real Estate Instituteand “improvement of maintenance quality,” in this order. Building owners who were optimistic in
the medium- to long-term outlook carried out intangible measures such as “improvement ofmaintenance quality” and “stockpiling water and food for tenants in preparation for a disaster”
more than those with a pessimistic view.

4. Thoughts on the future building business

Building Owner Survey 2019
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
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RESEARCH REPORT｜Xymax Real Estate Institute

1. Attributes of Building Owners
Building lease business operators
More than 60% of the managers of the building lease business were 60 years old or older (Figure 1). The
experience of the managers in the building lease business was equally spread (around 20%) between 20 years
or less, 30 years or less, 40 years or less, and 50 years or less (Figure 2). These trends were roughly the sameas in Tokyo & Osaka (2017) and Government-designated Cities (2018) surveys.

Figure 1: Age of Managers (n=1,103)

Figure 2: Experience in the Building Lease Business(n=1,102)

Sales of the building lease business accounted for around 70% of total sales among more than 50% of
operators, indicating the many operators’ principle business was building lease (Figure 3). In the interviews,
many building owners pointed out that although they first entered the building lease business to stabilize theirprinciple business, the business became their principle business due to changes in economic situations andother factors.
Figure 3: Share of the Building Lease Business to Total Sales (n=1,088)

Building Owner Survey 2019
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
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RESEARCH REPORT｜Xymax Real Estate Institute

Buildings in possession
Approximately 60% of all business operators owned one or two buildings in total, while 24% of operators
owned five or more buildings (Figure 4).
Figure 4: Total Number of Buildings in Possession (n=1,085)

We asked respondents the size (gross floor area) and age of one main building of the buildings they owned.
In terms of size, around 85% were less than 3,000 tsubo (1 tsubo = 3.3 sqm) (Figure 5). As for age, around 80%of the buildings were 20 years old or older (Figure 6).

Figure 5: Distribution of Size of Main Building(n=1013)

Figure 6: Distribution of Age of Main Building(n=1,037)

Building Owner Survey 2019
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
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RESEARCH REPORT｜Xymax Real Estate Institute

2. Condition of the Building Lease BusinessWe asked the operators about the overall condition of the building lease business “over the past year” and“over the next year.”

Situations of buildings in possession
Around 10% of the respondents replied that the number of buildings they owned “increased (will increase)”
both “over the past year” and “over the next year,” outnumbering building owners whose number of buildings
decreased (Figure 7).

Figure 7: Change in Number of Buildings Owned(Over the Past Year: n=1,009; Over the Next Year: n=1,100)

We then looked at the change in the number of buildings owned for each number of buildings owned in total.
The more buildings the owner owned, the more the total number of buildings in possession increased. Among
operators with five buildings or more, around 30% replied that their number of buildings “increased (willincrease)” both “over the past year” and “over the next year” (Figure 8).
Figure 8: Change in Number of Buildings in Possession (by Total Number of Buildings Owned)

Building Owner Survey 2019
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
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RESEARCH REPORT｜Xymax Real Estate Institute

Condition of the building lease business
As for the condition of the building lease business, 49% of the respondents replied that it was “good (willimprove)” “over the past year,” while only 26% replied so “over the next year.” Meanwhile, although “bad (willdeteriorate)” increased from 5% to 9%, the percentage was smaller than for “good (will improve)” (Figure 9).
Figure 9: Condition of the Building Lease Business(Over the Past Year: n=1,094; Over the Next Year: n=1,079)[Income]As for the income of the building lease business, a majority (more than 65%) of the operators replied that
there was little change, indicating that the income of many operators was stable (Figure 10). When comparing“over the past year” and “over the next year,” the percentage of operators who replied that their income was (orwill be) “increasing” dropped.
Figure 10: Income of the Building Lease Business

Building Owner Survey 2019
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
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RESEARCH REPORT｜Xymax Real Estate InstituteFurthermore, we examined the trend of each item in terms of DI—the percentage of “will improve(increasing/rising)” minus that of “will deteriorate (decreasing/declining)” (Figure 11). A figure larger than zeromeans that the percentage of “good, rising, increasing” was large, while a figure less than zero means that there
were many operators who felt the situation of the item was “bad, declining, decreasing.” The results indicatethat many operators felt that income and the environment surrounding income was good “over the past year,”but expected items other than vacancies to deteriorate “over the next year.”
Figure 11: DI of Income Items[Expenditure (Expenses)]
As for expenditure (expenses) of the building lease business, many operators replied it was “increasing” in all
items including overall expenditure, far outnumbering those who replied that it was “decreasing” (Figure 12).
Figure 12: Expenditure (Expenses) of the Building Lease Business

Building Owner Survey 2019
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This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
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RESEARCH REPORT｜Xymax Real Estate InstituteAs in income, we examined the overall trend using DI—the percentage of “increasing” minus that of“decreasing” (Figure 13). Since there was no significant difference between “over the past year” and “over the
next year” and the DI figure was positive, the results indicate that expenditure is on a rising trend. For repair
costs in particular, the DI was high at more than 50, which implies that a majority of the operators think that
repair costs will increase. Repair costs are expected to continue increasing as replacements of equipment anddefects in buildings increase as buildings grow older than 20 years old.
Figure 13: DI of Expenditure Items[Capital Expenditure]
Capital expenditure that accompanies replacement and new installation of equipment was increasing as in
expenditure (expenses) (Figure 14).
Figure 14: Capital Expenditure of the Building Lease Business

Building Owner Survey 2019
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
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RESEARCH REPORT｜Xymax Real Estate Institute

3. The Future Building Lease Business
OutlookAs for the outlook of the building lease business, the percentage of optimistic views (the sum of “optimistic”
and “somewhat optimistic” replies) in the short term (around three years) (34%) exceeded that of pessimistic
views (the sum of “pessimistic” and “somewhat pessimistic” replies) (20%) (Figure 15). On the contrary, thepercentage of pessimistic views in the medium-to-long term (five to ten years) (41%) exceeded optimistic
views (15%). A similar trend was seen in Tokyo & Osaka (2017) and Government-designated Cities (2018), whichindicate that few operators have an optimistic view on the building lease business in the medium-to-long term.
Figure 15: Outlook of the Business (Short-term: n=1,106; Medium- to Long-term: n=1,106)

We compared the outlook of the major cities with the Tokyo & Osaka (2017) and Government-designated
Cities (2018) surveys. All cities except for Osaka saw a drop in the percentage of optimistic views in both theshort-term outlook (Figure 16) and the medium- to long-term outlook (Figure 17) than in the previous outlook,while those in Osaka increased. The increase in optimistic views in Osaka was probably affected by therevitalization of the city due to inbound demand as well as by the Osaka Expo, the IR concept, the extension of
the linear motor train line and the resulting development of railways and other infrastructure.

Building Owner Survey 2019
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
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RESEARCH REPORT｜Xymax Real Estate Institute

Figure 16: Outlook by City (Short-term)

Figure 17: Outlook by City (Medium- to long-term)

Building Owner Survey 2019
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
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RESEARCH REPORT｜Xymax Real Estate InstituteInterest in future changes in social conditions and the impact on the building leasebusiness
We asked the operators about their interest in future changes in social conditions and the impact on thebuilding lease business (Figure 18). “Decreases in the population and the number of workers” was high in bothinterest and impact on the business of the operator’s company, followed by “rise in the need for aseismic
measures,” and “workstyle changes (work hours, form of employment).”
Figure 18: Future Social Condition Changes Interested in and their Impact
on the Building Lease Business (n=1,106)

Building Owner Survey 2019
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
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RESEARCH REPORT｜Xymax Real Estate InstituteWe then compared the future changes in social conditions that operators were interested in with Tokyo &Osaka (2017) and Government-designated Cities (2018) surveys (Figure 19). “Decreases in the population andthe number of workers” and “rise in the need for aseismic measures” had increased in both surveys. Theinterviews also revealed that operators had high awareness toward natural disasters that include not only
earthquakes but also wind and flood damages such as typhoons and local torrential rain, which have occurred
frequently in recent years, as well as toward stockpiling of provisions.
Figure 19: Interest in Future Changes in Social Conditions (Comparison with Past Surveys)
Left: Tokyo & Osaka
Right: Government-designated Cities(2017: n=492; 2019: n=517)(2018: n=561; 2019: n=589)

Building Owner Survey 2019
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
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RESEARCH REPORT｜Xymax Real Estate Institute

Measures to improve the value of buildings
We asked the operators about their implementation of measures to improve the value of buildings. The
measure that was implemented the most was “energy-saving of equipment (e.g. LED lights),” followed by“refurbishment of interior of common areas (e.g. entrance hall),” and “improvement of maintenance quality (e.g.
review of cleaning procedures and frequency, systematic implementation of refurbishments)” (Figure 20).
Figure 20: Measures to Improve the Value of the Building and Implementation Status (n=1,081)

Building Owner Survey 2019
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
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RESEARCH REPORT｜Xymax Real Estate Institute

As for the implementation of measures to improve building value by medium- to long-term outlook(optimistic/pessimistic), operators who had an optimistic outlook had a higher implementation rate than thosewith a pessimistic outlook in most of the measures (Figure 21). The implementation rate of optimistic operators
was high not only in tangible measures but also in intangible measures such as “improvement of maintenancequality” and “stockpiling water and food for tenants in preparation for a disaster.”Figure 21: Implementation of Measures to Improve Building Value by Medium- to Long-term Outlook(Optimistic or Pessimistic) (Optimistic: n=160; Pessimistic: n=449)

Building Owner Survey 2019
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
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RESEARCH REPORT｜Xymax Real Estate Institute

4. Thoughts on the Future Building BusinessIn this survey, we asked operators about their concerns toward the future building lease business in view ofchanges in the social and surrounding environments (write-in answers). We extracted the words that frequently
occurred in the answers and sorted them into concerns in buildings and building management and concerns insocial environment changes (Figure 22) (Figure 23). The size of the squares expresses the number of building
owners who were concerned.
Figure 22: Concerns in Buildings and Building Management (Frequently-occurring Words in Answers)

Figure 23: Concerns in Changes in the Social Environment (Frequently-occurring Words in Answers)

Building Owner Survey 2019
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
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RESEARCH REPORT｜Xymax Real Estate InstituteIn buildings and building management, concerns toward the aging of buildings and the resulting rebuilding
and renovations were extremely high, followed by concerns toward the maintenance of buildings required tocontinue operating them, and toward business succession such as the lack of a successor.
With regard to changes in the social environment, many operators commented on the decrease in demand
due to the declining population and the low birthrate and aging population. Some were also worried that largescale developments, developments in front of train stations, and an oversupply of buildings might affect building
management. There was also large interest in measures against natural disasters such as earthquakes and floods,changes in tenant needs due to workstyle changes and a diversification of workers including foreigners and theelderly, and changes in the surrounding environment following increases in accommodation facilities andhousing such as high-rise condominiums.
The following are extracts of the opinions of building owners obtained from the interviews and comments inthe questionnaire.

Aging of buildingsI am optimistic over the short term but somewhat pessimistic over the medium-to-long term out offear of the aging of buildings, since rebuilding is not so easy. (Tokyo)

Although equipment can be replaced due to aging, replacing water pipes and drainage pipes is difficult
because it takes time. I’m at a loss about pipes in the walls in particular, since they must all be replacedwith external pipes. (All cities)

I am looking at rebuilding, but I will have to raise the rent. Since the tenants will not be happy with arent rise as a result of rebuilding, I want to keep the building as it is for another 70–80 years by carryingout maintenance. (Tokyo)Due to a surge in construction costs, it would be financially difficult to rebuild on my own. I hope theauthorities would consider reviewing the City Planning Act and the Building Standards Act, relaxing theFire Service Act, and especially relaxing the building-to-land ratio, floor-area ratio, and the setback
regulation for small and medium-sized buildings as well, as advantages of rebuilding. (All cities)My building is 40–50 years old and approaching the time when it has to be rebuilt. Competitivenesswill become polarized depending on whether the operator can take advantage of redevelopment.
(Tokyo)

Although I feel the need for seismic strengthening of the building, I cannot do it due to constraints infunds and the relocation of tenants. There are vacancies, which implies that there may be some trouble
in attracting tenants. (Osaka)Seismic strengthening of the building frame was carried out as a corporate responsibility and BCP
measure. (Nagoya)Few owners of a building that is almost 20 years old have money to spare. Some kind of effort must
be made regardless of whether the building will be handed down to the next generation or given up.
(Nagoya)

Maintenance

I draw up a repair plan for every 10 years or so. (Tokyo and several other cities)I create a medium- to long-term plan that spans around 20 years. I manage the plan by listing up theprocesses and prices. (Tokyo)

Repair costs are rising, so I prioritize the repairs that must be done to prevent causing inconvenience

Building Owner Survey 2019
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
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RESEARCH REPORT｜Xymax Real Estate Instituteto the surrounding areas of the building and the tenants. (Sapporo)I switched maintenance work from outsourcing to in-house in order to reduce cost. (Tokyo, Hiroshima)

Large-scale repairs will increase in the future. In particular, mechanical parking facilities are difficult toreplace. But to maintain them without replacing them will cost a lot of money. (Niigata)When I built the building about 20 years ago, I had it designed to make maintenance work easy. In
consideration of maintenance work for equipment inside the walls, I secured an opening with a sliding
wall, and in consideration of trash separation, I secured places for trash cans or placed them. All of thewaterpipes are made of stainless steel. The initial cost was expensive, but they have reduced runningcost and trouble. (Niigata)The reasons for the increase in maintenance costs are the unit-price rise of repairs and the rise incleaning and personnel costs. (Tokyo)

I feel a shortage of labor for cleaning and security at our building. I make do by employing more older
persons and part-time workers. (Sapporo, Tokyo, and several other cities)

Work that require manual work might decrease in the future due to AI and IoT, which may lead to a
reduction in management cost. (Tokyo)I carry out careful maintenance frequently down to where you cannot see so that people who see thebuilding will say the building’s not bad for its age even after 50 years. (Nagoya)I put effort in differentiation and PR of the building. I regularly place newspaper ads to spread thename of the building. (Sendai)

Population decline, demandI am concerned about the decline in the number of small and medium-sized companies, who are ourmain tenant group. (All cities)

Recently at our building, the rent tends to be higher for offices than for stores. Since stores are
struggling to grow sales due to a shortage of labor, I cannot attract store tenants if the rent was high.
(Tokyo, Chiba)Amid changes in the cityscape due to changes in office demand and redevelopment, it is difficult toforesee how operate old buildings. (All cities)

Offices may start to leave regional cities due to the population decline. (Sapporo)Development, supply

Amid redevelopments being carried out in the city center, a key strategy would be how to spread theappeal of this district. (Fukuoka)

Large buildings are concentrated in front of the train station, and its impact has been gradually spillingout to the surrounding areas. The level should improve as tenants are replaced. (Nagoya)There has been active development mainly around Sapporo station, and companies have been
expanding from outside Hokkaido. However, the outlook is unclear as to whether this economic
situation will continue into the medium-to-long term. (Sapporo)I am concerned about oversupply when I look at the number of new, large buildings that are expected
to continue increasing and the number of redevelopment plans. (Tokyo, Nagoya, Yokohama, Fukuoka,
and several other cities)



There has been a hotel construction boom in the past few years, while the supply of offices has stopped
and condominiums have significantly decreased. The market is unbalanced as has never been in the

Building Owner Survey 2019
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
Copyright © 2019 Xymax Real Estate Institute Corporation. All rights reserved.

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RESEARCH REPORT｜Xymax Real Estate Institutepast. (Kyoto)Amid an oversupply of buildings, the situation is difficult since tenants tend to avoid old buildings
even if I dropped the rent a little. Dropping the rent significantly results in a disadvantage of attracting
lower quality tenants. (Kobe)

Workstyle changes, diversification of needsI am concerned about the demand outlook of 10 years ahead and beyond. SOHOs should increase dueto the population decline and workstyle reforms. (Tokyo)This is an extreme speculation, but offices may no longer be required as workstyles and workplaceschange. (All cities)

Tenant needs such as in the use of rooms are expected to change in the future due to workstyle reforms,
etc. We must respond flexibly to such needs. New rules must be created for changes in contract details
and regulations. We are struggling in our efforts to meet the diversifying needs of foreigners, women,
and the elderly. (All cities)

In consideration of the health of our tenants, we are considering planting trees on the rooftop andinstalling a space for refreshing (with a ping-pong table) and smoking rooms. (Tokyo)There has been a rise in demand for bicycles. We have two communal electric bicycles as a preventive
measure against illegally parked bicycles. (Tokyo)Since we now have more female workers, we renovated the toilets by exchanging the men’s andwomen’s toilet space with one another. (Niigata)The most important thing is to ensure that tenants stay for a long time. Investing in tenant satisfaction
would result in a drop in the necessary expenses and in stable revenue. (Okayama)Tenants have been holding events and networking gatherings between themselves. We sometimes
approach them and hold events as well. Relationships built between the tenants through these events
may be resulting in a virtuous cycle of developing into work. (Fukuoka)

Surrounding environmentDevelopment in front of the train station has attracted companies, leading to a drop in demand in the
traditional office locations. (Niigata)I think the changes in the surrounding environment (construction boom of hotels and condominiums)
will affect the operation of buildings in the future. Considering the cost for tenants to move out, thedemolition cost, and construction costs, it would be difficult to rebuild the building for lease. (Osaka)New supply of large office buildings tends to attract people and stores, leaving the surrounding areas
empty. (Chiba)A majority of demand for offices in Hiroshima city is by certain major companies and their affiliates. If
the companies moved outside the prefecture, the outlook for office demand would be pessimistic.
(Hiroshima)People are moving from the periphery to the city center, resulting in an increase in population, but I
don’t think office demand will increase in the future. (Okayama)I participate in a forum that aims to make Nagoya a world-class city where the residents can live in agood environment by redeveloping not only one area but a continuous range of areas. With the launchof the linear motor train line, the time will come when people living in Nagoya commute to Tokyo. The
medium- to long-term outlook is bright. (Nagoya)

Building Owner Survey 2019
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RESEARCH REPORT｜Xymax Real Estate Institute

There are moves to relax the floor-area ratio not only in front of the train station but also in thesurrounding areas in order to encourage development. Neighborhood associations and merchants’
associations are taking the initiative in drawing up a redevelopment plan to enable downtown areas
far from the train station to regain their liveliness. (Sendai)

Disasters

Last year’s torrential rain in western Japan raised our awareness. Insurance premiums also rose 5%.
(Okayama)

The 2005 Fukuoka earthquake was shocking since we didn’t have a strong impression of Fukuoka being
hit by a disaster. Adapting to disaster response will be required more than ever. (Fukuoka)We have allocated disaster provisions at three locations within the building—on the floor or in thecorridor. (Nagoya)Due in part to damages from typhoons, we reviewed and improved our BCP measures and manuals.
(Osaka)

There is a rising need to take measures against earthquakes, typhoons, and torrential rain. We havesecured emergency food and other provisions as well as bedding, water, and energy (emergency powersources, power generator) for those who have difficulty returning home. (Nagoya)

Other


In regular lease, negotiations for tenants to move out of the building for rebuilding or aseismic
refurbishments are difficult since the tenants are in a strong position. It is desirable that the Act on
Land and Building Leases is improved. (All cities)

I feel there is an overconcentration in Tokyo. The importance of having a base in our city is diminishing.
Some companies have withdrawn from our city, leaving only parking lots. (Chiba, Niigata, Nagoya)To tenants that do business with overseas companies, it is necessary to show that we contribute to theenvironment or society. We display energy-saving performance and obtained environmental
certification for our building to appeal to such tenants. (Tokyo)I am not optimistic about the future building business since there is no guessing what will happen after
the 2020 Olympics, including a population decline. I am rather pessimistic. (Tokyo)

Building Owner Survey 2019
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
Copyright © 2019 Xymax Real Estate Institute Corporation. All rights reserved.

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RESEARCH REPORT｜Xymax Real Estate Institute

Summary
In Tokyo & Osaka (2017) and Government-designated Cities (2018), we studied the situation of building
owners in major cities nationwide, while this survey revealed the current conditions and future outlook of thebuilding lease business across the nation as well as business operators’ awareness toward changes in social
conditions. Many of the owners of small and medium-sized buildings were elderly with few buildings (one ortwo) in possession, a majority of which were 20 years old or older. Even in today’s active building lease market,
the medium- to long-term outlook remains uncertain due to the possible increase in expenditure, such as repair
costs for old buildings and property taxes.
In this fourth survey, we found that building owners’ awareness toward the population decline, natural
disasters, and the surrounding communities had changed significantly from the previous survey. Xymax REI hassummarized the impact of changes in the environment surrounding real estate in Real Trends of Real Estate 2020(*3). The owners of small and medium-sized buildings showed a similar trend—they were more sensitive tochanges in the environment and made efforts and various initiatives to sustain good management of leased
buildings. The necessary efforts not only include tangible measures such as building refurbishments andintangible efforts such as tenant satisfaction improvement, but also initiatives to revitalize the community. Suchinitiatives by building owners are expected to become the foundation for future quality building stock.
Xymax REI intends to continue surveys of building owners and collections of best practices (*4) on a regularbasis to publish beneficial information.

*3

Real Trends of Real Estate 2020, released on September 30, 2019https://www.xymax.co.jp/english/research/images/pdf/20190930.pdf*4 Best Practices of Small-to-Medium-Sized Buildings –The 1st Report, released on September 24, 2019https://www.xymax.co.jp/english/research/images/pdf/20190924.pdf

Building Owner Survey 2019
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
Copyright © 2019 Xymax Real Estate Institute Corporation. All rights reserved.

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RESEARCH REPORT｜Xymax Real Estate Institute

Survey Overview
PeriodJune – November 2019

Coverage

21 government-designated cities(Sapporo, Sendai, Tokyo, Saitama, Chiba, Yokohama, Kawasaki, Sagamihara, Niigata, Shizuoka,
Hamamatsu, Nagoya, Kyoto, Osaka, Sakai, Kobe, Okayama, Hiroshima, Kitakyushu, Fukuoka, Kumamoto)
A total of 11,282 companies extracted from Tokyo Shoko Research (TSR)’s data
[Net sales] 10 million–3,000 million yen (30 million–3,000 million yen for Tokyo)[Industry] Companies whose “principal” or “secondary” business (thus registered) is office leaseNo. of valid
answers

Questionnaire: 1,106 companies; 9.8% response rate
(Number of companies: 59 in Sapporo, 61 in Sendai, 386 in Tokyo 23 Wards, 28 in Saitama,11 in Chiba,
57 in Yokohama, 17 in Kawasaki, 5 in Sagamihara, 10 in Niigata, 10 in Shizuoka, 9 in Hamamatsu, 73 in
Nagoya, 38 in Kyoto, 131 in Osaka, 10 companies in Sakai, 46 in Kobe, 15 in Okayama, 39 in Hiroshima,
27 in Kitakyushu, 48 in Fukuoka, 26 in Kumamoto)Interview: 26 companies

MethodQuestionnaire survey by post or online, and interview

Surveydetails

Ⅰ．Respondent company
Age of manager / business experience / share of sales of lease business / number, age, area ofbuildings in possession, etc.
Ⅱ．Situation of the office building lease business
Situation of buildings in possession / business condition / income / expenditure, etc.
Ⅲ．Future office building lease business
Outlook (short-term, medium- to long-term) / social conditions interested in / social conditions
affecting the building lease business / measures to improve the value of buildings, etc.

*The figures indicated in the charts contained in this report are rounded to the first decimal place and therefore may not add up to 100%.
*The charts contained in this report represent aggregations excluding non-respondents for each question.

Contact for inquiries concerning this report
Xymax Real Estate Institutehttps://soken.xymax.co.jp | E-MAIL: info-rei@xymax.co.jp

Building Owner Survey 2019
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
Copyright © 2019 Xymax Real Estate Institute Corporation. All rights reserved.

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