A definition of university – to many, it is an “educational facility”. From a real estate owner’s perspective, it is also defined as a “mass of property renters”. An existence of university means a consistent flow of new batch of students every year, allowing semi-perpetual influx of renters and thus, high rentability.
But what happens -albeit a rare case- when an university relocates? This is a major hit for an investor and it can happen in Japan time to time. Here is a some fact for property investment in Japan.
Ritsumeikan University, one of the top schools in West Japan, retains 6 campuses. 2 in Kyoto, 2 in Osaka, 1 in Tokyo, and 1 in Shiga. The Shiga campus, known as Biwa-ko (Lake) Kusatsu Campus (BKC) is located in Kusatsu City, about 75km east of Osaka.
In April 2015, the university added rather convenient Ibaraki Campus (20km north of Osaka downtown) and this move resulted a relocation of BKC-hosted departments to the new campus. As its consequence, a student body of 3,700 was transferred to new campus. This translates into roughly 1,500-2,00 units of rented condominiums in the BKC vicinity.
Real estate owners in the area is sweating – they are now offering a major discount to attract students. A rental rate of a typical studio apartment in the area is JPY35,000-60,000/month, and some of them are now offering JPY5,000-10,000 discount on the rent. Some owners are even offering zero-month deposit to sustain its rental income.
For Tokyo Tama area, west of Tokyo, might face the same situation. Chuo University is also considering to relocate its main campus to the central Tokyo area.
During the 1970s, many universities built new campus on suburb of the city to make the best use of expansive space. But the decline of Japanese population is forcing the university to re-centralize resources to the city again to attract more students.