Mizuho Bank Ltd. said Tuesday it plans to launch a ¥10 billion fund with a real estate developer and a trading company to build dormitories for international students studying in Japan.
The number of international students is expected to increase, with the government aiming to boost the figure to 300,000 from the current 200,000 by 2020. The projected increase makes dorms a stable investment, said Mizuho spokesman Ken Kobayashi.
Along with Mizuho, Tokyo Tatemono Co. and Marubeni Corp. will invest in the fund. Kobayashi said the window is open for parties interested in joining the project, adding that the fund will be launched around June.
While details are still to come, seven to eight dorms will likely be built. The monthly rent will be in the tens of thousands of yen.
Locations are also undecided, but Kobayashi said the group hopes to build the first complex in fiscal 2018.
While Japan hopes to attract more foreign students, there are apparently not enough dormitories to accommodate them.
An education ministry official said the ministry has heard from some colleges that their international students want to live in dorms, but the schools don’t have them.
Thus, the new fund will be a meaningful project, Kobayashi said.
The plan will also be promising from a business perspective because the vacancy rate is expected to be low, he said.
The fund will look to sell the properties to other real estate investment funds after running them for roughly five years.
According to a survey by the Japan Student Services Organization, a Tokyo-based semi-public body, 19.4 percent of international students were living in dorms provided by schools or public entities and 75.4 percent were staying in apartments or condos.
The average monthly rent was ¥31,000, while 68.6 percent said the space was less than 15 sq. meters.
The survey was taken in January 2016, collecting data from 7,000 international students, including those studying at colleges, vocational and Japanese-language schools.