ワンルーム [wan-rumu]One bedroom, studio apartment.
ワンケイ [wan-kei]One bedroom apartment with a kitchen.
ワンディーケイ [wan-dee-kei]One bedroom apartment with a dining and kitchen area.
ワンエルディーケイ [wan-eru-dee-kei]One bedroom apartment with a living, dining and kitchen area.
ワンエスエルディーケイ [wan-esu-eru-dee-kei]One bedroom apartment with a storage area, and a living, dining and kitchen area.
償却 [shokyaku]The paying off of a debt or obligation, such as a mortgage, in regular installments over an agreed period of time.
核テナント [kaku tenanto]The key tenant in a commercial development such as a shopping mall, leasing the largest floor space. The anchor tenant’s competitiveness and ability to attract customers is key to the development.
鑑定評価 [kantei hyoka]The market valuation of a property (land/building) by an estimate provided by a licensed real estate appraiser. In Japan, appraisers are designated by the Ministry of Land, Infrastructure, Transport and Tourism (MLIT).
Building Coverage Ratio \ Building to Land Ratio
建ペイ率 [kenpeiritsu]The Building Coverage Ratio is the size of a building’s floor plate compared to the total size of the plot of land upon which it resides. The ratio is calculated as a percentage in Japan, as follows:
BCR (%) = building floor plate area / plot area x 100
|Building Standards Law||
建築基準法 [kenchiku kijun-ho]Japan’s Building Standards Law contains basic rules for constructing buildings and establishes minimum safety requirements for natural disasters, especially concerning seismic performance in regards to earthquakes. It also prescribes the type of buildings that can be constructed in each zone, as well as restrictions on use, BCR, and FAR.
Common Area Maintenance
共益費 [kyoueki-hi]The shared areas of a building, including lifts, stairwells, corridors, and lobbies, require regular maintenance and cleaning. The cost incurred by this maintenance is divided among the number of tenants in the building and is known as the Common Area Maintenance fee. The owner of the building will receive this fee from the tenants as CAM income, which can then be used to pay a Building Maintenance company to maintain the common areas.
還元利回り [kangen rimawari]The rate of return on a real estate investment property based on the expected income the property will generate. Cap rates are calculated by dividing the Net Operating Income (the annual income) by the total value or price of the property and are expressed as percentages.
Capitalization Rate (%) = Annual Income / Total Value x 100
For the Capitalisation method, it is important to note that the annual income is often predicted and only applicable for Year 1. The Direct Capitalisation Method does not take into account appreciation/depreciation, changes in income, or inflation.
資本的支出 [shihonteki shishutsu]Funds used by a company to acquire or upgrade physical assets such as property or equipment.
売却益 [baikyaku-eki]A profit deriving from the disposal of a property or other investment, calculated by the amount by which the selling price exceeds the purchase price.
売却損 [baikyaku-son]A loss deriving from the disposal of a property or other investment, calculated by the amount by which the purchase price exceeds the selling price.
|City Planning Law||
都市計画法 [toshikeikaku hou]Japan’s City Planning Law defines the 12 zoning areas within areas prescribed for urbanisation for the purpose of regulating and inducing the appropriate use of land. Details on the three real estate zones (residential, commercial, industrial) can be found under the Building Standards Law.
cash on cash return/yield
キャッシュオンキャッシュ [kyasshu on kyasshu]The cash on cash rate of return is often used in real estate transactions and calculates the annual cash income against the amount of cash invested.
cash on cash return = Annual Cash Income / Total Cash Investment
共用部分 [kyouyou bubun]All non-leasable/lettable space within a property that is owned by all of the building’s tenants or by a management structure, which charges each tenant for maintenance. Common areas include, but are not limited to: lifts, stairwells, lobbies, driveways, store rooms, parking areas, and corridors.
Direct Capitalisation Method
直接還元法 [chokusetsu kangen-ho]See cap rate.
Floor Area Ratio
容積率 [yousekiritsu]Also known as FSR (Floor to Space Ratio), FSI (Floor to Space Index), or plot ratio. FAR is used by local governments in zoning codes. A higher FAR indicates a higher density. It is calculated by dividing the total square feet/metres of a building by the total square feet/metres of the plot.
FAR % = total floor area / plot area x 100
Financial Services Agency
金融庁 [kinyu-cho]A Japanese government organisation responsible for overseeing banking, securities and exchange, and insurance. The FSA is responsible for granting investment management business and investment advisory business licenses.
Gross Floor Area
延床面積 [nobeyuka menseki]The gross floor area refers to the total floor area inside the building, including the walls but excluding the roof. The GFA is used when calculating BCR and FAR.
Japanese Real Estate Investment Trust
不動産投資信託 [fudosan toshi shintaku]A listed real estate company, which accumulates funds from investors and invests said funds in income-producing real estate or mortgages. REITs sell shares of ownership and investment shares can be purchased on the Tokyo Stock Exchange through securities companies. REITs are permitted by income tax laws to avoid corporate income tax if 95% of their income is distributed to shareholders.
Letter of Intent
[kounyu ikoushoumeisho/kaitsuke shoumeisho]A formal letter expressing a party’s desire to enter into a purchase & sales agreement.
Loan to Value ratio
[fusai hiritsu]A risk assessment ratio used by financial institutions and others lenders when examining whether or not to approve a mortgage; the LTV ratio is the amount borrowed in the form of a mortgage divided by the purchase price of the property, and expressed as a percentage. The maximum LTV ratios for commercial properties are typically lower than residential, which are 80-90% on average in Japan.
Net Leasable Area
賃貸可能面積 [chintai kano menseki]The space in a building, excluding common areas, which can be rented to tenants. Also referred to as Net Lettable Area or Net Rentable Area.
Net Operating Income
純収益 [junshueki]A property’s operating income after operating expenses are deducted, but before income taxes and interest are deducted. If this is a positive value, it is referred to as net operating income, while a negative value is called a net operating loss.
機械式駐車場 [kikkai shiki chushajo]A mechanized parking system, controlled by a central computer. Popular in both commercial and residential buildings in Japan.
Ministry of Land, Infrastructure, Transport and Tourism
国土交通省 [kokudo kotsusho]A ministry of the Japanese government responsible for regulating urban development. Responsible for enforcing the City Planning Law and Building Standards Law, as well as Japanese real estate appraisal standards.
Purchase & Sales Agreement
Special Purpose Company
特別目的会社 [tokubetsu mokuteki gaisha]A special purpose company (also known as vehicle or entity) is a type of investment vehicle used for indirect investment in real estate. The SPC holds the title to the real estate and issues shares, which can be invested by multiple parties, providing limited liability.
印紙税 [injizei]Stamp tax in Japan is imposed on both buyer and seller when a PSA is signed. Please consult our Tax & Finance page for information on amounts.
35.583 sq ft/3.305 sqm
坪 [tsubo]A Japanese unit of land measurement, equivalent to 35.583 sq ft or 3.305 sqm.
利回り [rimawari]A measurement of the income return from an investment. Typically expressed annually as a percentage.