In the past several years, especially after the collapse of Lehman Brothers in 2008, Japan has seen oversupply of rental properties. This situation is same for commercial retail space.
Rental fees in some areas are now more than half of what they were several years ago.
Have you ever considered opening a branch in Japan?
As part of your business entry strategy whether it’s a retail , restaurant , or service offering, you should decide on your business location based on the following three distinct geographical patterns.
- Downtown area
- Suburban area
- Commercial complex
means basically an urban area in a major city where there are train stations nearby. Sometimes this is referred to as " business quarters ".
is much like the image of suburban area we have anywhere in the world. These areas are along main roads in Japan we called " national road ", " prefectural road ", and " residential road ".
In addition, these area have available and accessible parking facilities.
are shopping malls, large-sized supermarkets, and home centers that exists in both downtown area and suburban area.
"1.Downtown area " are commercial areas with a population of 1 million or more, for example Tokyo, and Osaka.
In such metropolitan areas, there is convenient access to rail transportation. Higher land prices in this area makes it almost impossible to have parking facilities. Your typical visitor would arrive on foot.
Downtown area is where a diverse range of businesses can be developed.
A daily ridership of the nearest station of approximate 50,000 people provides one of the best indications of this area.
However, for the 23 wards of metropolitan Tokyo, the urban areas of Osaka, and the other highly-developed areas of major cities, this number is 30,000.
In these areas, there are shops establishement for daily necessities and living, such as "supermarket", "drug store", "convenience store", "hair salon ", "cleaning store", "pachinko", "vocational school", "cafe", and "tavern".
In addition, "eyewear shop", "casual clothing shop", "fast food", "restaurant", "esthetic salon", "clinic mall", etc. have been developed to create a rich mix in these areas.
Many companies see the downtown area as the prime or anchor area to launch their business.
The amount of pedestrian traffic passing in front of the business is an important consideration.
In addition, size of the entrance and visibility from the street are also important.
Finally, if your shop is located near a well-known franchise or chain, you are in an ideal location.
"2.suburban area " is also known as road-side area.
It can divide into areas along national highway and a community road which shops of necessaries are side of（used by citizens）. These area are generally visited by customers in cars; therefore the external appearance of the store as well as any visual displays are key to attracting customers.
As most facilities are detached building what we called " freestanding type shop " , it is easier to visually express a shops individuality as opposed to establishment in a multi-tenant building.
In suburban area free standing type shops are the dominant, while multi tenant coplex are few.
The important factors in selecting such a facilities are width of the entrance from the street, and availability of parking nearby.
There has been a rise of "3.commercial complex " development in the last few years.
As a result of excess supply, there are commercial complex that have difficulty acquiring tenants .
Before, managers of commercial complex could be selective and choose the many tenants that wanted in, but these days stores are taking long hard look before committing.
Large developers had an advantage in the past, these days all developers without strategies which encourage customers to visit the site are fairly tough times.
Can you imagine where you can open your establishment now?
The timing may be good for you to open a successful business in Japan.
If you are considering opening a branch in Japan, please feel free to contact us.