Raising the Roof on Real Estate

To begin, there is an interesting trend in Japan where foreign investors are showing increased interest in the real estate market. In 2024 and 2025, foreign investors accounted for over 30% of real estate investments in Japan, totaling more than 2.3 trillion yen. This growing interest represents a significant opportunity for the Japanese market. Foreign investors are increasingly purchasing various types of properties in Japan, not only for investment purposes but also to provide housing for their families. How do you see the impact of this influx of foreign investment?

That’s correct. About 10 years ago, many investors from Europe, China, and the United States viewed Japanese real estate as undervalued. Since then, the market has steadily grown. Following the collapse of the economic bubble, property prices had remained low for a long time, but they have now begun to rise.

Compared to global standards, Japan’s real estate still offers attractive pricing, but in major cities like Tokyo, Nagoya, Osaka, Kyoto, and Fukuoka, prices are approaching—or even exceeding—bubble-era levels. This presents a challenge: as prices climb, homeownership becomes increasingly difficult for the average Japanese citizen. We’re now seeing a market that is more investment-driven than residentially focused, and there’s growing concern about the sustainability of these rising prices.

Despite this, the market continues to grow. Supply struggles to keep up with demand, and this ongoing increase in value makes it difficult for local buyers to enter the market. Particularly in major metropolitan areas, this situation is becoming pronounced.

After the COVID-19 pandemic, economic instability has made the housing market even more volatile. While Japanese properties remain more affordable than those in some other countries, the sharp price increases are making it harder for domestic buyers. The number of people who can afford homes is shrinking, and we worry about the long-term effects of this trend.

Thank you. How does this demographic shift—Japan’s shrinking and aging population—affect your market outlook?

That’s a very important question. Japan’s population is not only declining but aging at an unprecedented rate. In rural areas especially, we see towns where only four or five elderly people remain. Younger generations continue to migrate to major urban centers.

As a result, only urban areas and their surrounding regions remain viable for long-term real estate investment. These areas will continue to attract investment over the next 20 to 30 years. On the other hand, remote rural markets, where populations are falling below 100,000 to 150,000, face steep challenges.

For this reason, our company does not invest in areas with uncertain futures. We focus on regions where there is economic activity, younger populations, and growth potential. It’s vital to understand where investments can truly yield returns and where they cannot.

Hotel Abest Meguro Tokyo

How does digital transformation (DX) fit into your strategy, particularly with Japan’s declining workforce?

Digital transformation is essential for us. We began digitizing our operations as early as 2000, and we’ve accelerated these efforts in recent years. In fact, we received the DX Impact Award, recognizing our leadership in using digital tools to improve operational efficiency and profitability.

We are now implementing AI across all departments. From customer service to internal management, our goal is to automate wherever possible without compromising service quality. Even in areas like marketing, we’re moving towards fully digital, data-driven decision-making.

In the future, businesses that fail to embrace DX will not survive. With Japan’s workforce projected to shrink by one-third in the next 20 years, companies must become more efficient through technology or risk being left behind.

That’s very forward-thinking. Let’s talk about your company’s business model—the Life Stage Model—which you developed back in 1986. How does this model align with your corporate vision today?

Our Life Stage Model reflects our belief that real estate is more than just physical space—it’s about supporting people throughout the key stages of their lives. We don’t just provide housing; we offer services related to family life, community engagement, healthcare, and even matchmaking.

Today, we continue to expand this portfolio, strengthening both our property management services and community-based offerings. Our goal is to build deep, lasting relationships within each region we serve.

We are also looking to bring our proven Japanese property management systems and service quality to other parts of Asia. Our first step was entering the Malaysian market, where we are replicating our business model. We plan to continue this expansion into additional Asian countries.

That’s impressive. With the growing number of foreign investors and tourists, how do you support non-Japanese customers who may face language and cultural barriers?

We’ve taken several steps. First, we’ve established English-language service counters in selected branches, and our website also has an English version. This allows foreign residents and investors to access our services with greater ease.

In addition, we offer lifestyle support services—helping newcomers find schools, hospitals, or community activities. We aim to provide not just real estate solutions but also the soft infrastructure needed for a comfortable life in Japan. This comprehensive support is something that distinguishes us.

Breakdown of Elitz's business strategy

Your company was listed on the Tokyo Stock Exchange in 2023. What were the key motivations for going public?

There were three main reasons. First, listing on the exchange greatly enhances trust, both domestically and internationally. When negotiating new developments or entering overseas markets, having that recognition changes how we’re perceived.

Second, it supports recruitment. Young talent in Japan often looks to listed companies first when job hunting, so being public strengthens our ability to attract the next generation of professionals.

Third, while raising capital was not our primary goal—we already had sufficient financial resources—being listed helps us build credibility and opens doors to new business opportunities.

Looking ahead to your company’s 45th anniversary in six years, what are your key goals?

The key will be further advancing DX (Digital Transformation). Wherever possible, we aim to replace manual labor with technology while maintaining or enhancing service quality. AI will play a major role in operations, decision-making, and customer service.

We also aim to continue expanding our successful business models across Japan and into Asia, ensuring that we adapt to demographic changes and technological advances. Balancing human touch with digital efficiency will be the defining challenge—and opportunity—of the next five years.

Finally, if you could describe Elitz Holdings in one phrase, what would it be?

I would say: “A company you will never regret choosing.” We strive to provide services that make our customers feel secure, valued, and satisfied every step of the way. Our vision is to be the best in Japan, and eventually the best in the world.