Japan Commercial Construction Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

Japan Commercial Construction Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

During the time frame of the forecast, it is expected that the market for commercial construction in Japan will register a CAGR of more than 6.7%.Even though some parts of the building industry are having trouble right now, Japan's medium- to long-term growth story is still strong.Over the upcoming four quarters, the Japanese building sector is anticipated to expand steadily.

• Government spending and subsidies for a housing program, as well as the government's anticipated focus on significant infrastructure projects, will aid in Japan's market growth.
• Since the economic bubble burst in the 1990s, the Japanese construction industry has been stuck for a long time. But in the last 10 years, it has started to grow again. Rebuilding efforts after the Great East Japan Earthquake in 2011 helped the area get back on its feet. The 2021 Tokyo Olympic Games served as a major demand generator in recent years. Both the Chuo Shinkansen maglev line's development and other building projects slated for the Osaka World Expo 2025 are anticipated to have a similar effect.
• For instance, in 2022, In the "Jingumae 6-chome District Type 1 Urban Redevelopment Project," which is being constructed in Harajuku, Tokyo, Tokyu Land Corporation and Kanroku Redevelopment have stated that they will start a business there in the spring of 2024. A building with a total floor area of about 19,940 square meters, consisting of 9 floors above ground and 3 floors below ground, will be built on the site of the former Olympia Annex Building at the intersection of Omotesando and Meiji Dori, along with commercial facilities, public amenities, and railroads. Parking area, substation building, etc. The structure is expected to be finished in August 2023.
• Even though things are calm now, the COVID-19 pandemic had a negative effect on the building industry. It caused many construction projects to temporarily stop and move more slowly. In contrast to many other countries, Japanese law did not give the government "strict" authority to impose steps, like a city-wide "lockdown," to stop the occurrence or spread of COVID-19.

Despite the Japanese government lowering the cost of solar power, the creation of solar power plants is still going on. Renewable energy projects, like those that use onshore wind and biomass, are all moving forward steadily.Four offshore wind power projects have been put up for bid, and more possible sites are soon to follow.

To reach its goal of 22% to 24% of all electricity in Japan being supplied by renewable energy, the government plans to introduce 1 million KW of offshore wind power projects in 2030 and 3 million to 45 million KW of wind projects in 2040. Investors and participants from around the world are paying heed to this.

There were 592 electric power sources using solar energy in Miyagi Prefecture as of April 2022. In total, Japan had over 3.9 thousand solar generating facilities. The majority of renewable electric power plants during the measurement era were located in Miyagi Prefecture, with solar power plants making up the majority of these facilities.

Some of the major projects are as follows:

• A maglev bullet train called the Linear Motor Car Project is being considered to travel between Shinagawa Station in Tokyo and Shin-Osaka Station in Osaka. Passengers will be able to travel from Tokyo to Shin-Osaka in 67 minutes at the train's top speed of 505 kilometers per hour (314 mph). The project will be completed in two stages, the first of which will see the opening of a line between Shinagawa Station and Nagoya Station in 2027 and the second of which will see the opening of a line between Nagoya Station and Shin-Osaka Station in 2037. The entire project, including the Nagoya-Shin-Osaka leg, is expected to cost about JPY 9.3 trillion (USD 70.74 billion) to build. The Shinagawa-Nagoya leg is expected to cost about JPY 5.5 trillion (USD 41.9 billion) to build because of environmental concerns.
• Many parts of Tokyo, like Shibuya, Toranomon, and Shinagawa, are being redeveloped in time for the 2020 Olympics and Paralympics and to make Tokyo more competitive with other cities around the world. The tallest building in Japan will be finished in the Toranomon-Azabudai neighborhood in 2023 as part of these redevelopments, and in the Otemachi neighborhood in 2027, an even higher building will be constructed.
• Between Shin-Aomori Station in Aomori District on the island of Honshu and Sapporo Station on the island of Hokkaido, a distance of 361 kilometers, is being built as part of the Hokkaido Shinkansen (Shinkansen in Hokkaido Area). In March 2016, the first section was finished and put into use. The final 212 kilometers between Shin-Hakodate Hokuto Station and Sapporo Station are currently being built, and service is expected to begin in 2031.

Inflation and rising costs of materials have put pressure on the building industry around the world, and Japan is no different.Along with what is happening around the world, there are also growing worries about the number of skilled workers in the country.In Japan, where the number of people working is going down, it is expected that foreign workers will play a big role in building and market growth over the next three to four years.

TODA Corp., Kumagai Gumi Co., Ltd., Konoike Building Co., Ltd., Asanuma Corporation, Ichiken Co., Ltd., and Nihon Kensetsu Co., Ltd. are a few notable market participants. Local contractors expect more opportunities in the commercial construction sector to establish their presence in the industry given that these industry veterans hold the lion's share of the market.

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