Commercial Property in Japan: Buildings, Shops and Investment Units

Start with the rent roll and lease terms, then deduct management fees, repair reserves, fixed-asset tax and insurance to find the net figure. Request the building's inspection and renovation history, plus the structural drawings if available. A cheap building with deferred maintenance can erase its yield within a few years.

Stress-test the numbers: assume a few months of vacancy each year and a modest rent cut at renewal. If the deal still works, it is more likely to survive a slow market. Finally, confirm that the zoning allows the current use and any future change you have in mind, and check for pending city redevelopment plans that might affect access or value.

• Standard leases can be protected, making it hard to evict a tenant without just cause.
• Fixed-term leases exist but are less common for shops.
• Deposits (shikikin) and key money are market norms.
• Consumption tax applies to the building portion, not the land.
• Building age, seismic compliance and fire safety drive both insurance and bank appetite.

Many foreign investors buy through a Japanese company (godo kaisha or kabushiki kaisha) for tax and liability reasons, and local banks may lend to such entities with a track record. Read the Japan financing page, the consultation guide, and compare residential income with Japanese apartments.