Mitsubishi Estate Breaks Ground on $1.3B Entertainment City in Central Tokyo

Mitsubishi Estate and Tokyo Broadcasting System have broken ground on an entertainment industry hub in central Tokyo that will span 205,800 square metres (2.2 million square feet) including office, theatre, retail and hotel space.

Mitsubishi Estate and TBS last week announced the start of work on Akasaka Entertainment City, which is set to rise on a site in Minato ward’s Akasaka area, with the goal of establishing a hub for fostering industry development.

“We aim to become a base that delivers the best content to the world, including establishing facilities where entertainment-related companies, startup companies, and creators can gather,” the companies said in a statement, with a local news report from 2021 indicating that the partners were committing JPY 200 billion (now $1.34 billion) to the project.

“This is one of the most exciting development projects lined up in the next five years. Tokyo still lacks inclusive entertainment facilities, and this project will fill in the whitespace,” said Hideaki Suzuki, senior director of research for Japan at Cushman & Wakefield.

Entertainment Hub

Akasaka Entertainment City, which was certified by Japan’s Ministry of Land, Infrastructure, Transport and Tourism as a private urban regeneration project on 9 February and as a strategic national zone in 2021, is located less than 300 metres from TBS’ headquarters at Akasaka Sacas, with the broadcaster planning to maintain its base in the 2008-vintage development.

The new two-building complex is led by a 40-storey, 167,650 square metre commercial tower which will have 34 levels of office space, four floors of retail and a single layer startup hub.

Located in a traditional entertainment area, Akasaka Entertainment City also includes an 18-storey, 38,150 square metre block which will include 12 floors of hotel space and six levels for theatres. The developers plan to incorporate a 4,900 square metre plaza connected directly to Akasaka station on Tokyo Metro’s Chiyoda Line, which will include space for events as well as including a bus terminus that will improve visitor accessibility.

The complex, which is being built on a 14,177 square metre site formerly occupied by the Kokusai Shin-Akasaka development, is scheduled for completion in 2028, and is also within seven minutes’ walk of two more subway stations.

Supply on the Way

Developers will deploy an average of 488,595 square metres of grade A office annually over the five years ending in 2028, according to a report from Colliers, with that quantity representing an 11.8 percent increase from the average over the 2019 to 2023 period.

However, with the Mitsubishi Estate-TBS project incorporating features such as demonstration areas, disaster shelter, solar power generation and a top-level ranking under Japan’s CASBEE regime for sustainable buildings, analysts see the development gathering attention through its special facilities.

“With central Tokyo expected to see a large supply of office space entering the market over the next few years, there remains concerns of rising vacancy in certain submarkets especially with high supply concentrations,” said Tetsuya Kaneko, head of research for Savills Japan. “However, similar to recent nearby projects like Azabudai Hills, the Akasaka project will remain attractive thanks to its diverse functionality, especially its sizable entertainment and hotel segments.”

Premium Office Developer

Mitsubishi Estate is starting work on Akasaka Entertainment City amidst a larger wave of office activity by the company, both domestically and overseas.

Mitsubishi Estate sold a 13-storey office building in Minato’s Minami-Aoyama district earlier this month to Japan Real Estate Investment Corporation, a Tokyo-listed REIT managed by the company, for JPY 21 billion after completing the project one year ago.

In January, the Japanese property giant started construction on a two-building complex in Tokyo’s Shibuya ward, which is scheduled to be completed by the end of February 2027.

The Tokyo-based builder has also been active overseas, including submitting plans in February to retrofit a central London building. After acquiring 1 Victoria Street in 2013 for a reported £180 million ($229.3 million), the developer proposed a makeover of the 1965-vintage office building in Westminster, that would extend its floor space by around a third to 700,000 square feet.

Mitsubishi Estate posted a 24.6 percent year-on-year decline in attributable profit to JPY 77.5 billion for the nine months through 31 December as the firm’s earnings declined due to the lack of large capital gains.