Parts of central Tokyo set to undergo major facelift

Winner takes all is normally the outcome in a clash of titans. But in this case, two giants of real estate are locked in a battle that will leave separate imprints on transformed chunks of central Tokyo.

Industry leader Mitsui Fudosan Co. is forging ahead with plans to redevelop Hibiya so as not to fall behind second-ranked Mitsubishi Estate Co., which has changed the face of the adjoining Marunouchi district.

Both companies have major landholdings in the respective areas they are developing. They both envisage high-rises that cater not only to office workers but also to people looking for shops and restaurants.

Mitsui Fudosan on Friday became the top shareholder of Imperial Hotel Ltd., which manages the prestigious hotel facing Hibiya Park that is associated with famed U.S. architect Frank Lloyd Wright.

The company acquired a 33.16-percent stake for about 86.1 billion yen from Kokusai Kogyo Co., which operates bus and taxi services and hotels and has been rebuilding its operations under guidance from the U.S. investment fund Cerberus Capital Management LP.

Cerberus had negotiated sales of Imperial Hotel shares with Mitsui Fudosan and Mitsubishi Estate.

At a news conference last week, Mitsui Fudosan President Hiromichi Iwasa said the company plans to redevelop Hibiya, a business and commercial district near JR Yurakucho Station, "in a comprehensive manner."

Under a redevelopment project announced in 2005, Mitsui Fudosan will build a high-rise on a plot facing Hibiya Park in fiscal 2012, at the earliest.

The company is now considering expanding the project, possibly by reconstructing the Imperial Hotel, which is only about 100 meters from the site.

The hotel, which was originally established in 1890, reported about 57 billion yen in group sales for the year ended March.

Currently, two buildings owned by the Mitsui group--Sanshin Building and Hibiya Mitsui Building--stand on the site. Demolition of Sanshin Building began in May.

A senior Mitsui Fudosan official said the company decided to acquire Imperial Hotel shares partly to compete with Mitsubishi Estate's redevelopment of Marunouchi.

Mitsubishi Estate owns about 30 percent of the buildings in the business center west of JR Tokyo Station.

In 1998, the company started redevelopment of a 120-hectare area that encompasses Marunouchi, Otemachi and Yurakucho.

It has replaced six buildings, including the Marunouchi Building and the Shin-Marunouchi Building.

The new buildings house not only company offices, Marunouchi's traditional tenants, but also commercial outlets, such as retailers and restaurants.

Mitsubishi Estate plans to spend an additional 450 billion yen to replace seven to eight more buildings in the district by 2017.

For Mitsui Fudosan, Hibiya's importance has increased partly because of uncertainty over its stated ambition to redevelop Tokyo's Nihonbashi district.

The company had said it wanted to transform the Nihonbashi district, where it is headquartered, into a financial center because the Bank of Japan's head office, the Tokyo Stock Exchange and securities houses are located nearby.

But many of the buildings it owns in the district are medium-sized, and it is expected to take time to win agreement from other landowners to redevelop the area.

In June, the government announced a plan to develop a hub of foreign financial institutions in Tokyo.

[via THE ASAHI SHIMBUN]

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