Construction Firms Benchmarking Roppongi Hills

Chief executive officers and executives of construction companies have been visiting Tokyo’s Roppongi Hills recently.

Located near the Roppongi Station in Tokyo’s Minato Ward, Roppongi Hills contains apartments, a museum, a hotel, office buildings, shopping malls, and parks.

Ever since the bursting of the Japanese real estate bubble, Japan was known as the graveyard of commercial buildings. Roppongi Hills, however, attracts from 100 to 150 thousand tourists a day and is raking in the income.

As conventional housing projects have lost their luster due to the many regulations on real estate, construction companies are now eyeing mega-complex developments like Roppongi Hills.

Ssangyong Engineering Construction President Kim Suk-joon is planning to make a four-day trip to Roppongi Hills with all of his executives for four days starting from April 19. It is rumored that Ssangyong already has plans to develop two downtown areas north of the Han River in Seoul and that it has already ended negotiations with the executing company.

Prior to this, Vice President Jin Young-hun of SK Engineering & Construction visited Roppongi Hills from March 23 to 25 with 15 of his executives. SK Engineering & Construction is in the middle of carrying out construction work for a multi-complex named Pentaport in Asan, Chungbuk Province.

Director Ryu Hyun-ju of the Housing Business at Daewoo Engineering and Construction visited Roppongi Hills from March 11-15. President Jung Chun-boh of Shinyoung visited Roppongi Hills about 20 times since 2003 to gather ideas for Gwellcity, which is a complex undergoing construction in Cheongju, North Chungcheong Province.

For the development of Roppongi Hills, landowners provided their land in exchange for returns on sales of apartments, shops, and offices.

The greatest advantage of involving landowners and sharing profits with them is that they are more willing to offer their land.

Korean construction circles are interested in Roppongi Hills because of its unusual financing methods. Roppongi Hills signed up tenants to take part in the financing and awarded landowners with proceeds from the apartment sales. They say that this is the only tactic, with financial companies tightening their grip on credit to construction companies.

sukim@donga.com