Mori Building Co., Japan’s biggest closely held developer by sales, and LVMH Moet Hennessy Louis Vuitton SA, the world’s largest luxury-goods maker, will form part of a group developing a retail and office complex in central Tokyo, in a bid to cash in on expectations of increasing consumer spending leading up to and during the 2020 Olympic Games.
The two companies, along with Sumitomo Corp. and J. Front Retailing Co., will spend a total of ¥83 billion ($799 million) on a 13-story building with six underground levels, said Shingo Tsuji, president of Mori Building, at a press conference Wednesday in Tokyo.
Construction of the building, which will provide some 147,600 sq. meters of commercial floor space, will start this month and be completed by November 2016, the companies said.
Japanese developers are keen to start projects ahead of the 2020 Olympics, as expectations of higher consumer spending and stronger demand for office space push up land prices in major cities.
The price of land in the Ginza shopping district, where Japan’s most expensive commercial property is located, rose 9.6 percent in 2013 to ¥29.6 million per square meter, according to the land ministry.
“With the Olympic Games coming up, we must accelerate project development,” Tsuji said, adding that the proportion of investment by each of the four companies has not yet been finalized.
The recovery in land prices has attracted Paris-based LVMH to invest in the project, Yves Carcelle, a member of the LVMH Executive Committee, said at the press conference.
Ginza is “one of the key locations in the world,” Carcelle said. “The group acquired part of the building, which means not only commercial commitment, but really a financial commitment to the project.”