Research

Location Strategies for Research and Development Facilities in Japan The Potential of R&D Property Lease

As the importance of research and development (R&D) activities grows, corporate real estate strategies for R&D become increasingly important for business growth. This report focuses on “R&D centers” in Japan, shows their history and geographical trends, and discusses the potential for establishing a rental market for R&D centers and the asset specifications as real estate.

December 03, 2024

Investing in intangible assets, including research and development (R&D), is crucial in today’s economy. The location of R&D facilities is influenced by various factors, such as real estate market conditions, existing company sites, and access to researchers, related institutions and knowledge. Historical changes in the manufacturing industry, as well as the political and economic environment, have influenced the present geographical distribution of these R&D centers. As new trends in manufacturing and R&D focus on the benefits of urban concentration and functionality, there is a continued emphasis on central metropolitan areas. In recent years, the real estate market has seen a rise in the supply of rental properties specifically designed for R&D activities, particularly in the Kanto region (also called as the Greater Tokyo area), mainly centered around Tokyo (NLA: 318,000 sqm), and the Kinki region (also called as the Greater Osaka area), centered around Osaka (NLA: approx. 124,000 sqm). These rental properties are equipped with the necessary facilities to cater to specific R&D requirements, including different specifications and laboratory equipment, setting them apart from regular office buildings. However, given the unique nature of R&D activities amongst companies, there are many aspects and considerations that need to be thoroughly examined when selecting a rental space as a potential location. Effective communication and collaboration with experienced real estate specialists and relevant stakeholders within the organization are vital for the success of such projects.

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