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Land grabs raise security issues

A foreign-capital property buying spree that has extended to areas in and around facilities of the Japanese Self-Defense Forces and the American armed forces could pose a threat to Japan’s security.

In the town of Kutchan, southwestern Hokkaido, it has been confirmed that foreign investors have purchased three tracts of land totaling 109 hectares within 3 km of a Ground Self-Defense Force camp. One of the tracts also turned out to be the first forest area known to have been purchased with foreign capital. The purchase price was five times the prevailing market value.

Concerned with that land purchase, the Hokkaido prefectural government sent questionnaires to registered owners of forest areas near SDF and police facilities, but 54 of the questionnaires were returned, marked “addressee unknown.” These owners own 579 hectares of land.

Unconfirmed rumors say that tens of hectares of land have been bought with foreign capital near Misawa Air Base in Aomori Prefecture. The base is the de facto “front line” of the defense of the Far East.

According to a local real estate agent, it is difficult for administrative officials to confirm land purchases because the buyers don’t register the transactions. He added that it would not be easy for the Defense Ministry to find out who owns particular pieces of land near the base.

One example of attempts to buy land near a U.S. military facility in Japan was found in Kyushu. In 2011, the U.S.-Japan Joint Committee decided to combine major U.S. weapons and ammunition depots. The new facility into which these depots are to be integrated will have tunnel-shaped storage and a mooring facility. It is to be built on land reclaimed from a bay. The trouble is, the entire facility will become completely visible from a small uninhabited 12-hectare island inside the bay.

Until a few years ago, the island was said to be under the ownership of a construction company from outside the prefecture. Since then, though, the island has been sold several times, and nobody knows for sure who the owner or owners are.

In Nagasaki Prefecture, meanwhile, money flowing from Shanghai has bought tracts on Nakadori Island (Goto archipelago) for the stated aim of developing fisheries and tourism. The same fund also has rented a container yard — part of the island’s port facilities — from the prefectural government.

The Chinese investment has caused concerns about the nation’s security because the island is the site of a national oil stockpile totaling about 3.4 million kiloliters — a volume equivalent to seven days of oil consumption nationwide.

On Okinoerabu Island in Kagoshima Prefecture, a foreign-based fund is seeking to acquire about one hectare of land next to an Air Self-Defense Force base.

Even more conspicuous moves for land acquisition are seen in Okinawa where American military bases occupy large areas. Landlords who own base property receive “rents” from the Japanese government. The Internet runs detailed ads such as “Boost your assets by purchasing land now occupied by the military” and “Good investment in military bases in Okinawa — low risks with a 3 percent annual return.” The number of purchases by those from outside Okinawa Prefecture has increased conspicuously since 2005.

Since rents for U.S. military land are on the rise, real estate firms brokering deals for small lots are enjoying a good business. More than 30,000 landowners receive rent from the Japanese government for the use of their property by the U.S. military. Of them, 231 live outside Japan, according to 2008 Defense Ministry statistics.

A strange situation has thus developed. Even as the Japanese government pours huge sums of taxpayer money into land for military facilities to help ensure national security, the land on which the facilities stand has become a financial instrument, with rents being paid to non-Japanese.

Japanese real estate firms assist with the acquisition of large tracts with foreign capital. Top-ranking real estate agents and firms affiliated with railway companies are especially active. It is said that they eagerly hold seminars in Shanghai and Beijing to encourage real estate investment in Japan. They are thus profiting in the dubious business of selling Japanese property to Chinese investors. The seminars stress that it is much easier to buy real estate in Japan than it is in China.

One person close to a major real estate firm said, however, that Chinese investors move very quickly, even by professional real estate agents, when land prices show signs of dropping. The Chinese flip the property and get out of the market.

An institutional factor in Japan has made it easier for foreign investors to buy up real estate in Japan. Individual property rights are more rigidly protected in this country than in many others.

For example, when the mayor of Ishigaki in southern Okinawa tried to land on one of the Senkaku Islands — which are within the city’s boundaries but are the subject of territorial disputes with China and Taiwan — to conduct environmental research, the Japanese government stepped in to stop the mayor’s plan, citing the will of those who own the land and have leased it to the state.

Chinese media are closely following and reporting in detail what they call Japan’s moves to restrict land purchases by foreigners. An Internet version of the People’s Daily carried an article stating that the Hokkaido prefectural government is trying to restrict foreign purchases of land, while another Internet media said the ruling Democratic Party of Japan has set up a special project team to study ways to restrict land acquisitions by the Chinese.

Two things are clear: Overseas acquisition funds are targeting land within and adjacent to military bases in Japan, and those countries with a keen interest in Japan’s diplomatic and other moves tend to conceal the fact that their citizens have purchased land in Japan.

This is an abridged translation of an article from the April issue of Sentaku, a monthly magazine covering Japanese political, social and economic scenes.