Ichigo's Strengths

Ichigo's Powerful Value-Add Capabilities

Asset profitability can be increased via strategic value-add renovations based on the return on investment with consideration to how long the asset will be owned. Ichigo deploys its environmental and construction technology, leasing capability, and deep knowledge of related laws and regulations in conducting effective real estate value-add. Ichigo implements value-add improvements to soft services as well, via hands-on property management tailored to each asset and building tenant relationships through regular visits.

Examples of Ichigo's Value-Add Renovations

Kyoto Hotel (Kyoto Shijo-Dori)
Kyoto Shijo-Dori

Ichigo acquired a 23 year-old hotel in a great location on Kyoto Shijo-dori, conveniently accessible to major tourist spots. Ichigo rebranded and renovated all rooms and the exterior, and changed the operator.

There was no downtime during renovation, which was completed in June 2014. 100% occupancy was achieved for 3 consecutive months. Customer satisfaction was improved by enhancing both the hotel itself and the services offered, and executing effective operations based on a detailed understanding of the market. These efforts have increased both occupancy and average daily rate (ADR).

Revenues doubled versus the initial forecast, and GOP (Gross Operating Profit) was three times higher than the initial forecast.

【Summary】

Location:Shijo, Shimogyo-ku, Kyoto City
Land Area:663 m²
Building Area:4,892 m²
Zoning:Hotel (138 rooms)
Access:5 min. walk from Shijo Station

Tokyo Retail (Shinbashi)
Shinbashi
Shinbashi
【Summary】

Location:Minato-ku, Tokyo
Land Area:213 m²
Building Area:1,157 m²
Zoning:Retail
Access:1 min. walk from JR Shinbashi Station

The building was acquired with an eye on redevelopment of the area including this building. However, Ichigo altered its business plan due to changes in real estate market conditions. The building was leased to a single tenant at a below-market rate despite its convenient location. Ichigo's Leasing Team approached 400 potential tenants, which resulted in bringing in a convenience store on the first floor, and restaurants on the other floors. Structural improvements to fully meet all safety standards, the skeletonization, and value-add renovations were finished in a timely manner to meet the desired opening dates of each restaurant. A signage on top of the building which had not been approved was removed, contributing to an increase in asset value. As a result, NOI improved by 1.7 times.

Tokyo Retail (Akihabara)
Akihabara
Akihabara
【Summary】

Location:Chiyoda-ku, Tokyo
Land Area:282.54 m²
Building Area:1,628.20 m²
Zoning:Retail
Access:1 min. walk from JR Akihabara Station

Given that a single-tenant master lease was expiring at the time of acquisition, the building was converted to a multi-tenant structure in order to maximize earnings. Furthermore, one floor which was used as storage was renovated in order to expand its leasable area. As a result, SEGA moved in occupying 6 floors (B1 through 5th) with restaurants occupying the remaining three floors. Rate per tsubo1 nearly tripled as a result of these renovations that better catered to tenant needs, thus enhancing asset value and raising the cap rate to 8%. 1
1 tsubo = 3.3 m²

Tokyo Retail (Daikanyama) 
【Summary】

Location:Shibuya-ku, Tokyo
Land Area:189.50 m²
Building Area:520.12 m²
Zoning:Retail
Access:1 min. walk from Daikanyama Station

The three-story building sits in an ideal location just one minute from Daikanyama Station. After acquisition Ichigo rectified illegally-extended exterior stairs and removed the interior stairway with tenant consent. This resulted in a 13% increase in usable space and a significant increase in asset value.

Tokyo Residential (OWCA Azabu-Juban)
OWCA Azabu-Juban
OWCA Azabu-JubanOWCA Azabu-Juban

Ichigo developed a high-grade residential building at a prime location in Azabu-Juban, a high-end residential area in central Tokyo. Ordinances of Minato Ward require buildings above a certain height to have car and bicycle parking in the building. However, given the building's proximity to the station, thre was low demand for such parking space, and so Ichigo instead installed large elevators and set aside space within each of the apartments to park bicycles.

By eliminating communal car and bicycle parking within the building, the first two floors became available for retail use, thus increasing the building's overall leasable value.

Furthermore, the building was designed to have 9 floors with higher (2.8m) ceilings as opposed to a more typical 10-floor structure with lower ceiling height. The higher ceilings served as a key differentiating factor therefore contributing to a rapid lease-up.

【Summary】

Location:Minato-ku, Tokyo
Land Area:142.80 m²
Building Area:786.55 m²
Zoning:Residential/Retail
Access:1 min. walk from Azabu Juban Station

Differentiated Development Plan

Development Plan
Tokyo Retail (Hiroo)
Hiroo

After acquiring this building located in a prime location, Ichigo rectified building code issues therefore enabling the building to be leased to high-quality tenants and resulting in NOI doubling.

In selling the value-added building, Ichigo provided consulting services to an individual client. Ichigo worked with lenders to achieve strong loan terms for the new owner, thus building an on-going relationship with the owner. Ichigo continues to handle this building's management.

【Summary】

Location:Minato-ku, Tokyo
Land Area:107.14 m²
Building Area: 329.88 m²
Zoning:Retail
Access:3 min. walk from Tokyo Metro Hiroo Station

Other Value-Add Scenarios

Building Code Issues

  • Many buildings have issues to be rectified due to building extensions and lack of response to building code revisions.
  • Rectification of building code issues enables setting the trust beneficiary interest in real estate, leading to better liquidity.

Earthquake-Preparedness

  • The Great East Japan Earthquake has raised awareness for earthquake protection and sustainability issues.
  • Execution of anti-seismic measures leads to asset value improvement.
  • Accurately explaining to tenants the execution of anti-seismic measures leads to a better sense of safety.

Eco-friendliness

  • Installing more energy-efficient air conditioners and lights.
  • Covering exterior walls with plants to decrease cooling costs.

Others

  • Avoiding disputes at time of sale by thoroughly examining complicated property ownership contracts.