Focus on Mid-Size Real Estate
Ichigo's focus is on mid-size assets. More than 90% of real estate in Japan is considered mid-size (total floor area less than 5,000 m2) and the market for such assets is relatively liquid. With 95% of domestic companies having fewer than 50 employees, the pool of potential tenants for these assets is considerable and spans a wide range of industries
Furthermore, the market for mid-size assets in Japan, particularly those in the 1 to 5 billion yen range, is less competitive than other market segments. The segment is too small for the large real estate companies to enter in a cost efficient way, but it is too large for most individual investors. The asset class is mainly owned by wealthy individuals and small companies, who in many cases have neglected to invest in the buildings as they have aged. As a result, tenants are often dissatisfied with the facilities or the seismic-resistance of the buildings. So while mid-size assets may appear labor-intensive and inefficient, it is in fact an asset class offering relatively large value-add potential. Ichigo's competitive strength is its Value-Add capabilities, allowing it to purchase mid-size assets with an understanding of what improvements can be profitably implemented.
Focusing its efforts on mid-size assets allows Ichigo to make full use of its strengths in a segment of the market with relatively little competition. In addition, a portfolio of mid-size assets diversifies risks more fully than an equally-sized, more-concentrated portfolio of large-size assets.
(as of February 2019)