June 12, 2020
Episode 13 - Unevenness in office locations for IT companies - Companies and administrative districts that will survive the coronavirus outbreak

The number of people infected with the coronavirus continues to grow, and the impact of the coronavirus on industry cannot be ignored. At least in Japan, industry differences seem to make a difference in terms of sales performance. In this episode, we will be looking at office location, which tends to be biased by industry, and we hope that you will be able to make use of this information when investing in Tokyo.

Now that many people are being forced to work from home, it has become difficult to commute to work or go out for entertainment, and it is the information and communications companies that seem to be doing well in this environment. Looking quite broadly at the situation, what has actually happened so far at least in Japan is that kids and students have been forced to stay at home, everyone in the house is demanding more Wi-Fi speed and capacity due to the increase in video playback and online meetings, people are getting new monitors and microphones, and people are starting to use paid, highly functional chat tools on a monthly basis. 

For now, without considering company size or business model B2C or B2B, let's work from the assumption that many IT-related companies are less susceptible to emergencies. Of course, management's ability to make decisions, speedy reaction, and flexibility in business structure are prerequisites in order for this hypothesis to stand. Nevertheless, it is a fact that there are at least a few companies that are taking advantage of the coronavirus outbreak.

If this were to be the case, it would mean that there would not be a decrease in the tax revenue of administrative districts where there are many IT-related companies. A ranking of the number of offices of IT companies announced by the Ministry of Internal Affairs and Communications (MIC) is shown below. It is exactly the same breakdown as the top 5 most expensive residential districts (although the order is different) for general rental apartments mentioned in Episode 2.

Informaton and communications industry








*Source: Quoted by International Interface from the “Percentage of Business Establishments in all Industries by Major Industry Category in Municipalities With 10,000 or More Employees (Top Five Municipalities)” in the “2014 Economic Census for Business Frame ” released by the Ministry of Internal Affairs and Communications in 2015-


Among the 23 wards of Tokyo, the wards mentioned above, which are sometimes referred to as the "central five wards of Tokyo," have a large number of residents who can afford high rents and companies that can easily maintain stability in the event of an emergency, and thus support the financial base of the supervising administration. If tax revenues decline, it will eventually have an impact on the safety and security of residents including investment in public facilities such as hospitals and the support system for ward residents, and for this reason corporate tax is a big part of many stakeholders’ lives.

Although there are always waves of companies moving in and out of offices due to economic fluctuations, even within the 23 wards of Tokyo, there are different factors that affect why you can expect high yields in an area and what kind of tenants you can expect. For now, let's pray that the negative effects of the coronavirus will be as minimal as possible and that the global economy and human life will recover quickly. We hope that the day comes as soon as possible when you can visit Japan for real estate investment tour without having to worry about anything!


Source:  “2014 Economic Census for Business Frame” released by the Ministry of Internal Affairs and Communications in 2015

“Minato Internationalization Master Plan - Promoting community participation and cooperation for foreign residents in a multicultural society - Revised version FY2018-FY2020”

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