MITSUI REAL ESTATE DEVELOPMENT CO., LTD. History
Tokyo
103
Japan
Telephone: (03) 3246-3065
Fax: (03) 3275-2273
Incorporated: 1941
Employees: 8,947
Sales:¥1.06 trillion (US$7.81 billion)
Stock Index: Tokyo Osaka
Company History:
Mitsui Real Estate Development Co., Ltd. is a pivotal member of the Mitsui group. The company and its subsidiaries are involved in a large variety of projects and operations on both a national and international scale. Mitsui Real Estate is Japan's leading developer of office buildings, commercial properties, and housing. Mitsui Real Estate, with the support of other Mitsui group companies, has capitalized on Japan's land shortage, and specialized in developing high-rise complexes that make profitable use of premium space. With strong capabilities in investment, development, construction, brokerage, financing, and consulting, the company is also expanding into new fields through its 201 subsidiaries and affiliates. Mitsui Real Estate began overseas operations in 1972. In major markets throughout the world, the company serves as a developer, investor, and consultant.
The company was a pioneer in high-rise building development. By the mid-1980s, Mitsui Real Estate was Japan's largest real estate company, measured by real estate sales and related activities. The company has expanded its rental division by renting office high rises in the heart of Tokyo. It has also concentrated its efforts in the sales of apartment houses and single family homes, as well as urban development.
In 1941 Mitsui Real Estate Development Co., Ltd. was founded as the real estate division of Mitsui Gomei Kaisha, a central holding company of the Mitsui zaibatsu, or financial group. The company was incorporated under its present name as the real estate company to serve the needs of the Mitsui group. Originally, the shares of the company were held exclusively by the Mitsui family. After World War II, in 1949, however, the Allied occupation authorities broke up the zaibatsu, Mitsui among them.
In 1956 remants of Mitsui Honsha, the successor to Mitsui Gomei Konsha, merged with the company. In 1957 Chiba Prefecture contracted with Mitsui Real Estate for dredging and reclamation work in the development of an industrial zone built on a landfill, and Mitsui Real Estate subsequently entered the coastal-land-development business. The firm then started the New Town development on the outskirts of Tokyo.
The company's steady growth continued throughout the 1960s. In 1961 the company began the development and sale of land for housing. In 1964 a major acquisition for Mitsui Real Estate was the Sanshin building in central Tokyo. Four years later, in 1968, other members of Mitsui group combined efforts with Mitsui Real Estate, and the Mitsui Housing Problem Conference convened to undertake construction and sale of high-rise apartments. One result was the completion of the Kasumigaseki Building, Japan's first skyscraper. The Mitsui Real Estate Sales Co., Ltd. subsidiary was established in 1969 and began to sell prefabricated housing.
The company's growth continued in the 1970s. In 1972 the company began its international operations, and by 1990 Mitsui Real Estate owned the Exxon Building in New York City, the Halekulani Hotel in Honolulu, the Hotel Himalaya Kathmandu in Nepal, and the 505 Montgomery Building in San Francisco. In 1974 the Mitsui Home Co., Ltd. subsidiary was established and began the sales of prefabricated homes built by western-style two-by-four method of construction instead of the traditional Japanese method of using four-by-eight panel products. The Mitsui Harbour and Urban Construction Co., Ltd. was established from the company's waterfront-development and-construction subsidiaries. In 1974 the company also completed the Shinjuku Mitsui Building in Tokyo. The 55-story building makes liberal use of semi-mirrored glass and has become a landmark.
Mitsui Real Estate has expanded its overseas markets and has been active in development in the United States and southeast Asia. In 1983, in a step to strengthen its international activities, Mitsui Real Estate established a wide-ranging business agreement with Coldwell Banker Company, a U.S. real estate group with offices throughout the United States.
Since 1981 Mitsui Real Estate has built condominiums and office and commercial floor space throughout Japan through its consulting and joint-development program. This program, known as "Let's," is designed to make the most of Mitsui Real Estate's development expertise and the real estate assets of landowners who prefer to retain partial or complete ownership of the property. Property developed through Let's includes condominiums, high-rise office buildings, and hotels. By 1991 approximately half of Mitsui Real Estate's supply of new office space was developed under Let's.
The year 1981 also witnessed the opening in suburban Tokyo of Lalaport Funabashi Shopping Center, the largest in Asia. A 243-room hotel is also on this site. In 1983 Tokyo Disneyland opened, owned by Mitsui affiliate Oriental Land Co., Ltd.
In 1984 the Mitsui Garden Hotel opened in Osaka. This was the first directly owned and operated Mitsui hotel and was constructed as a central part of Osaka's redevelopment plans. In 1985 Mitsui Real Estate completed the Mitsui Nigokan in Chuo-ku, in central Tokyo, the building was the first office building available for leasing that operated under computer control that was sensitive to charges in the environment within the building and that compensated for those changes. It has facilities to accommodate several information network systems.
A new-business-development division was established in 1984. By 1985 several new ventures had been established, including the first Kenko Club, a health and fitness club, in the Ginza area of Tokyo. Mitsui Real Estate also established Wellness Co., Ltd. in 1984 through a joint venture with a health agency. Members make regular visits in order to detect potential health problems early. In 1985 Mitsui Real Estate Housing Service Co., Ltd. began offering the Bell Boy system, a housecleaning and security service.
Mitsui Real Estate began its Okawabata River City 21 project in 1986. The development fuses residential, cultural, and commercial functions.
In 1987 Mitsui Real Estate completed a 36-story residential complex, Bell Park City, in Osaka. A total of 3,600 condominium units were planned for completion at that site in 1991. Also in 1987, the Shin-Kasumigaseki office building, was completed, and the Kenko Club in Sapparo opened.
Mitsui Real Estate completed several major projects in 1988. The Nishi Azabu Mitsui Building in greater Tokyo was completed along with the Nishi-Azabu Park Towers. Mitsui Real Estate's overseas operations opened the Xi'an Garden Hotel in Xi'an, China, and completed the 461 Fifth Avenue Building in New York City.
In 1989 the company completed River Point Tower, Japan's tallest apartment building, in Okawabata River City 21. The firm also opened hotels in Hiroshima, Chiba, and Kyot. The company expanded its interest in shopping centers with the opening of a center in Hokkaido. Overseas Mitsui completed the 505 Montgomery Building in San Francisco.
The company continued to grow in the 1990s, when it started the Fuchu Intelligent Park and Yokkaichi Amusement Forum 21. Alpark, the largest shopping center in western Japan, was also completed. Two hotels opened in Osaka and Hyogo, and the Figueroa at Wilshire Building was completed in Los Angeles.
In 1989 Mitsui Real Estate achieved record earnings and revenues for the 12th consecutive year. At the start of the 1990s, however, the Japanese real estate industry headed into a difficult period. Higher interest rates and pressure from the Japanese Ministry of Finance on banks and other financial institutions to limit property-related loans posed challenges for the real estate business.
Having established itself as joint-venture partner in real estate development throughout the 1980s, Mitsui was confident that it would be able to meet future challenges and join in projects with the greatest potential. The redevelopment of waterfront areas will be a larger part of Mitsui's Real Estate activities, and the firm planned to place greater emphasis on office building and housing projects in suburban areas. Resort and leisure projects were expected to grow in the 1990s.
A vital strategy for strengthening Mitsui Real Estate's business will be to raise its overall share of the leasing market. Floor space under the company's management rose approximately 350,000 square meters annually from 1985 through 1990 and amounted to 3.4 million square meters by 1990. The company has also become more involved in subleasing. The demand for new office space has risen, and Mitsui Real Estate can gain a greater share of total floor space under management in Tokyo through a commitment to subleasing.
Mitsui Real Estate's other core business, housing sales, construction, and the various support services of its subsidiaries and affiliates, grew steadily during the 1980s. Sales of housing accounted for 28.9% of the firm's revenues in fiscal 1989. Condominium sales are a major portion of operations in this category, amounting to more than half of property sales.
Another important part of the company's operations is construction, which provided 31.1% of revenue in fiscal 1989. Mitsui Home is Japan's oldest supplier of two-by-four houses. This construction method is becoming increasingly popular in Japan due to the freedom of design, and resistance to earthquakes and fires. Mitsui Home has been responsible for more than 10,000 of these homes. Mitsui Real Estate Sales Co., Ltd., Japan's largest real estate brokerage network, had 30% of the brokerage market.
Free time has become more important than ever in Japan, and the two-day weekend has become common. Mitsui Real Estate has responded to this situation by concentrating on the development of day-trip facilities and is planning to construct the Lalaport Ski Dome, Japan's first full-scale indoor ski facility that will enable visitors to enjoy skiing any time of the year. Nearby is the Tokyo Disneyland, and for longer vacations, Mitsui Real Estate has opened resorts such as Mitsui-no-Mori, a three-hour drive from Tokyo.
Mitsui Real Estate's overseas investments amounted to approximately ¥216.8 billion in 1990, most of which are in the United States. The company hoped that diversification of overseas operations would ensure further long-term stability. The company also planned to expand geographically in Europe.
Principal Subsidiaries: Mitsui Real Estate Sales Co.,Ltd.; Mitsui Home Co., Ltd.; Mitsui Designtec Co., Ltd.; Mitsui Home Components Co., Ltd.; Mitsui Real Estate Housing Service Co., Ltd.; MF Lease Co., Ltd.; Mitsui Harbour and Urban Construction Co., Ltd.; Daiischi Seibi Co., Ltd.; Nishinihon Building Service Co., Ltd.; MF Building Management Co., Ltd.; Daiichi Seed Co., Ltd.; Toyo Landscape Construction Co., Ltd.; Lalaport Co., Ltd.; Uni Living Co., Ltd.; Garden Hotel System Co., Ltd.; Garden Hotels Kansai Co., Ltd.; Hotel Sun Garden Lalaport Co., Ltd.; Hotel Sun Garden Kashiwa Co., Ltd.; Garden Hotel Chiba Co., Ltd.; Garden Hotel Hiroshima Co., Ltd.; Mitsui-no-Mori Co., Ltd.; Wellness Co., Ltd.; Cany Corporation; Mitsui Fudosan Loan Guarantee Co., Ltd. Mitsui Fudosan Finance Co., Ltd.
Further Reading:
Mitsui Real Estate Development Co., Ltd. Corporate Brochure 1990, Tokyo, Mitsui Real Estate Development Co., Ltd., 1990.Source: International Directory of Company Histories, Vol. 4. St. James Press, 1991.