The Shinjuku west-exit asset swap and a ¥130 billion redevelopment (2022)

Between ageing assets and a large investment

The asset swap at the Shinjuku west exit is easiest to read not as a well-timed property sale but as a recomposition: letting go of ageing assets that had lost their earning power and turning the proceeds into the next investment. The Hyatt Regency Tokyo was an asset more than forty years past its 1980 opening, whose occupancy fell sharply during the pandemic; the department store’s main building was likewise an asset still searching for its shape after cutting selling space. That Odakyu, having only just finished a half-century investment in quadruple tracking, could immediately embark on another large one appears to be because it had settled this rearrangement of assets first.

On the other hand, completion is still some years off in FY2029, and what kind of customers and what returns a 48-storey, roughly 260-metre complex will bring to Shinjuku can only be known afterwards. Just as the earlier redevelopments of Shibuya and Marunouchi changed the character of those districts, the Shinjuku west-exit project aims at something more than replacing a building — a rewriting of the district itself. At the time of writing, how far that aim will bear fruit remains unclear.