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Why did NHK overpay for Shibuya property?

Flash Dec. 29
Flash Dec. 29

A few doors down from the popular Manhattan Records shop in Tokyo’s Shibuya shopping district is a large parking lot. Suitable for more than 100 vehicles, the lot is located a mere five minutes on foot from the headquarters of public broadcaster NHK.

Such a proximity to the headquarters likely played a key role in the submission of a successful bid of 35 billion yen for the 3,419-square-meter site on November 20 by a business subsidiary of the broadcaster.

The purchase, however, has not proceeded smoothly. A probe has been launched by an audit committee of NHK due to the fact that approval for the purchase was not granted by its Board of Governors.

That’s not all, says Flash (Dec. 29), the subsidiary of NHK overpaid for the property — by a lot.

A real estate agent describe the price as “extraordinary.”

“If we look at the 35-billion-yen price, that converts to 33 million yen per tsubo,” says the source, referring to the unit of measurement that converts to 3.31 square meters. “For that part of Shibuya, the going rate is 6.6 million yen per tsubo. To build an office or apartment building, that’s not the right price. Even 20 billion yen would be excessive.”

According to the NHK board, the land is to be used for offices for the broadcaster’s nine group companies and studios for its ultra-high definition 4K and 8K technologies. For the purchase, a loan was extended to NHK Business Create, which is the subsidiary that made the purchase.

NHK, however, is managing the project, with chairman Katsuto Momii spearheading the effort.

According to Flash, an inspection of land records reveals that a real estate investment company purchased the land in 2008. A different real estate agent says the purchase price was 40 billion yen.

“The ‘Lehman Shock’ sent the market into the toilet, and the company wanted to sell the property off as soon as possible,” says a different real estate agent, referring to the fallout following the bankruptcy of financial services firm Lehman Brothers. “Even as a parking lot, the company can’t make a business out of such a fixed asset since it is being hit by taxes and interest.”

The company thought a hotel chain was interested in purchasing the property.

“The land was offered at a discount of 35 billion yen,” continues the agent, “but the chain backed out since they already have a number of properties in the Shibuya area.”

Katsuto Momii
Katsuto Momii

The company then, according to the magazine, turned to Momii.

When reached for comment by Flash, a representative of the real estate investment company said, “Since this matter is related to an individual project, we can not reply due to confidentiality concerns.”

In addition to the audit, members of the NHK board have also criticized the purchase since a plan was not submitted regarding the proposed construction.

A representative of the public relations department of NHK said that the matter was not being considered problematic.

A reporter for the magazine approached Momii when he was out in public. The chairman refused to say anything on the matter. (K.N.)

Source: “NHK 350 oku-en taka sugiru tochi konyu keikaku tonza no kai,” Flash (Dec. 29, pages 18-19)