TT-647 -- A Good Time to Move Office and Home, e-biz news from Japan

* * * * * * * * * T E R R I E 'S T A K E * * * * * * *
A weekly roundup of news & information from Terrie Lloyd.

General Edition Sunday, January 29, 2012, Issue No. 647


- What's New -- A Good Time to Move Office and Home?
- News -- No nuclear power in Japan by May?
- Candidate Roundup/Vacancies
- Upcoming Events
- Corrections/Feedback -- Yakuza involvement in business
- News Credits

SUBSCRIBE to, UNSUBSCRIBE from Terrie's Take at:


---------- PBXL TOTAL TELEPHONY SOLUTION (TTS) ------------

PBXL’s Total Telephony Solution is the answer for unlimited
domestic and international calling. With PBXL cloud
telephony and TTS, enjoy a fully managed solution with zero
variable costs. No office is too big or too small to save

- Unlimited calling within Japan and 23 countries
- Flat-rate calling charges based on number of phones
- PBXL will review your current bills and save you money

Check out our website today at
e-mail us at or call us at 03-4550-2557

------------ PBXL is BUSINESS COMMUNICATIONS --------------


Last week the shares of Sumitomo Realty and Development
Co., slid to their second lowest point in five years (2009
Lehman Shock was slightly worse), as the market took in the
news that the company's earnings will be hit this year by a
glut of office space in Tokyo. The rate of vacant offices
has been rising steadily, with a 12% surplus in large floor
space buildings and 9.01% overall.

That there is a glut isn't really so surprising. The high
yen, pending higher taxes, the Eurozone crisis, and many
other uncertainties have meant that companies are playing
it safe by holding head count where it is, or by cutting
Tokyo staff while outsourcing or expanding their operations
abroad or to lower cost rural locations (Hokkaido, Sendai,
Nagasaki as prime examples). As a result, the average
rental rate has been falling steadily, and in the five
central wards of Tokyo, including Shibuya-ku and Minato-ku,
the average rent for office space was just JPY16,932 per
tsubo (3.3 sq. m.), down 3.71%, or JPY653 from the same
time last year, and down about 25%-30% from rates before
the Lehman Shock.

Actually, let's not forget that even before Lehman, rent
rates for high-grade property were at least 20% lower than
they were in 2000, which were in turn at least 30% less
than in the 1990's bubble period. So we're talking about a
cumulative drop of more than 50% in rental rates in the
last 20 years -- just another example of Japan's rampant
deflation. For what it's worth, we do think this is the
bottom of the market, and that there is sufficient
population and economic activity that if the near-term glut
is resolved, prices will at least stay where they are before
rising again with the replacement of old buildings. Another
good earthquake will speed this process along...

Companies like Sumitomo (in particular) have been bullish
on the market and feel that the current economic setbacks
are just temporary. They reason that Japanese firms are
indeed starting to adapt to the high yen, and as they keep
expanding their empires by acquisition abroad, the demand
for people and infrastructure to support such activity will
drive up demand for office space in Tokyo. There is also
the ongoing migration of Japan's rural population to the
cities, which also pushes up local demand in downtown

[Continued below...]

-- NAGAMINE & MISHIMA - Securing Your Success in Japan ---

Starting a new company in Japan? Looking to streamline
your current operations?

The team of bilingual experts at Nagamine & Mishima is able
to provide high quality accounting, payroll and tax
services that both exceed expectations and fit your budget.
Our services help customers improve their operations and
bottom line results.

To find out more about our services and how we can help
your business in Japan succeed, please visit our website or reach us directly by telephone
at 03-3581-1975 or by email at


[...Article continues]

But their logic misses several important developments
between Japanese multinational companies of today and those
of 10-15 years ago. Firstly, many multinationals are
finding that the management of the companies they are
taking over abroad are at least as competent and efficient
as their own head office staff. So they reason: "why mess
with something that ain't broke?" Further, the rise of
Internet-savvy companies has finally driven home to big
players that even on their home turf they'd better get more
automated and efficient or they will become someone else's
dinner. Elsewhere in this newsletter, we point out the
gradual demise of mega-publisher Recruit, a former employer
of masses of people.

Then of course there is China, TPP, and foreign price

So right now, it's safe to say that there is a lot of
hurting landlords around who are starting to realize that
they would rather have some income than none -- especially
in the B- and C-grade building segments. This is great news
for companies that are planning to renegotiate rents, or to
move if their landlords are blockheads and won't negotiate.
Our company moved this time last year after failing to win
significant rent reductions for the aged building we were
in, and achieved a cost reduction of about 40%. If we'd
waited until now, probably we could have leveraged another
10% on top of that number, but at the cost of paying the
additional higher rent. Interestingly, the building we
moved from is still empty today.

Probably the main reason that office tenants are not moving
en mass at present is the cost and inconvenience of doing
so. The savings offered by a 10%-15% reduction in rent is
in many cases not going to yield an advantage over the
costs of moving. In our case, moving about 70 people cost
us roughly:
* Deposit on new premises (locked up cash) -- JPY15MM
* Moving costs (our staff packed and unpacked themselves)
-- JPY12MM approx
* Lost productivity (about 1 week of payroll) --
JPY8MM-JPY10MM approx
* Refurbishment of existing premises -- JPY15MM
* Less, refund on existing premises deposit -- JPY12MM

Total move/refurbishing costs: JPY35MM
Total cash outlay: JPY38MM

Not a small amount and a sum that will take us about 20
months to recoup.

But in going through the numbers, at least one of our
readers recently made a nasty discovery about what his
existing rent costs consisted of and provided him with the
added incentive to move out. Specifically his landlord was
making a profit out of the electricity charges. We'd never
heard of this before, just assuming that electricity and
other utilities fees are charged at the published rate,
particularly since landlords provide no additional value.
However, as the reader found, this is far from correct.

Occupying multiple floors since 1986, the reader's firm
was being charged at JPY35/kWh while the actual
average cost was around JPY12.69/kWh (power used
to be cheaper). He worked out that over the years he'd
helped the landlord make a profit on his power bill of a
surprising JPY63m, something our reader was quite
ticked off about. So ticked off, in fact, that he took the
landlord to court, only to be told by the Judge that
since the payments had been going on so long they
could be considered customary and an acceptance of
the charge. We find it hard to believe that customary
deceit can be considered legal, but there you go.

So have you checked your power bill closely, recently? The
correct price you should be paying can be figured from an
article on the January 18th front page of the Japan Times,
which stated that TEPCO plans to raise business electricity
charged by 17%, amounting to an additional JPY2.61/kWh for
customers consuming less than 2,000kWh, and by JPY2.58/kWh
for those using more, thereby yielding a rate of
JPY15.36/kWh. You could of course look at your monthly
power bill, but from experience we find TEPCO power bills
to be almost impossible to decipher, and the numbers never
match the published rate.

Lastly, while we are focusing on moving, if you are living
in a rental apartment/house at the higher end of the market
(i.e., a monthly rent of more than JPY300,000), then you
should also be looking at moving. The fact is that there
are a ton of "gaijin houses" out there that are empty and
have tumbled in price since 3/11. Now that we're coming up
to the first anniversary of the disaster and foreign
families have not really returned (some international
schools have seen up to 50% of their all-foreign kids rolls
disappear), this is an ideal time to be negotiating big
discounts. 30%-50% is what we suggest on any property of
JPY500,000/month and above. The landlord can only say "no"
-- but increasingly and hesitantly they are saying "yes".
Fancy living in a house after an apartment for so many
years? What about teaming up with 2-3 friends and
co-renting a posh place in Nishi-Azabu or Shibuya? Per
room, you're looking at the same price as a smallish
apartment somewhere else (JPY150,000/person/month).

If you are looking for a new place, then the good news is
that Metropolis' new property website,,
is now up and running and has over 13,000 rental properties
listed -- making it the largest English listing in Japan.
The property data is all updated at least weekly (some
major realtors update their lists daily) and the site has
filters to help you search more quickly. A
shopping-basket-save function lets you browse, save, and
come back later to go through more places.

BTW, don't miss a reader's Yakuza comments in the
Feedback section of this issue, scroll down for it. Very
interesting insider commentary.

...The information janitors/


----------------------Delta Air Lines----------------------

Redeem your miles and enjoy more travels

Celebrate the New Year with SkyMiles!
Register to Delta SkyMiles co-branded credit card and enjoy
three exclusive benefits for you to use your miles such as
JTB travel voucher, domestic flights within Japan on
Skymark, or ‘Pay with Miles’ program.

Please visit for more details.

+++ NEWS

- Abduction cases to go through Foreign Ministry
- NEC to cut 10% of workforce
- No nuclear power in Japan by May?
- Foreign workers back in vogue
- Recruit in trouble?

-> Abduction cases to go through Foreign Ministry

In what appears to be an admission by the Japanese
government that it's going to be really, really tough to
change its own court system regarding shared custody of
children, and recognizing child custody rulings in courts
of other countries, it was announced last Monday that the
Foreign Ministry will be put in charge of international
child abduction cases. Unfortunately, the Kyodo News
announcement appears to confirm that the Foreign Ministry
will do little to actually force Japanese abductors of kids
of international marriages to return them. For example, it
mentions the Ministry will merely confirm the kids are OK
and "inform parents" of a Japanese mediation system. ***Ed:
As we all know (this writer from personal experience), the
chotei system in the Family Courts is a farce and has
nothing to do with justice or fairness. What the Japanese
courts recognize in order of priority is: 1) the opinion of
the Japanese spouse, 2) who actually has the kids --
99.999% of the time it's the Japanese spouse abductor or
the hearing wouldn't be in Japan, 3) what the kids
themselves say -- after being alienated from the other
parent, and 4) lastly whether there are any Japanese
relatives that can adopt the kids. In other words, the
foreign spouse doesn't figure at all in court decisions.**
(Source: TT commentary from, Jan 23, 2012)

-> NEC to cut 10% of workforce

We've been saying for a while now that NEC is in serious
trouble, and Thursday's news that the company would slash
10% of its workforce, or around 10,000 jobs, appears to
confirm this view. The firm says that it is making the cuts
because of poor sales of cell phone handsets, but we
suspect this is just an excuse. The company was never that
big in cell phones to start with, and certainly wouldn't
have 7,000 workers here in Japan in that unit -- which is
how many people are going to be fired in Japan. Needless to
say, the share market has a dim view of the company and
NEC's shares are down by more than 50% over this time last
year. (Source: TT commentary from, Jan 26,

-> No nuclear power in Japan by May?

Bloomberg has a very good story this last week about the
high likelihood of Japan having no nuclear power plants in
operation by the end of April. Right now, the country is
down to its last 3 of 54 power plants, and these are due to
be idled for safety checks over the next few weeks. While
the safety checks are normal procedure, those plants idled
so far need approval from local governments to restart, and
the governor of Fukushima has said he wants a nuclear-free
prefecture, while the governor for Niigata, where TEPCO's
big Kashiwazaki Kariwa plant is located, has said he wants
guarantees there won't be another Fukushima over his way.
***Ed: So the speculation now is whether Japan will get
through February on oil and gas-fired plants, and whether
oil prices will push Japan into more trade deficits this
year if there is to be no more nuclear power.** (Source: TT
commentary from, Jan 27, 2012)

-> Foreign workers back in vogue

According to the Labor Ministry, foreign workers are back
in Japan in force, and there are now 686,246 people working
here, up 5.6% over this time last year. Broken down by
nationality, there were 297,000 Chinese workers, 117,000
Brazilians, and 70,000 Filipinos. Almost 40% of these
people are working in manufacturing and another 27% in
contracting. ***Ed: This is quite amazing, given the sheer
number of people who fled the country after the Fukushima
incident. It also tells us that Japanese firms are still
using low-cost, disposable foreign labor as a competitive
strategy -- inevitable, we suppose, given the high yen.
However, this has to be a problem for local Japanese
under-employed who might have otherwise done those jobs.**
(Source: TT commentary from, Jan 28, 2012)

-> Recruit in trouble?

Hot Pepper magazine and jobs publishing firm, Recruit,
announced on Friday that it has sold its Ginza 7 building
to real estate investment firm Hulic for approximately
JPY10bn. While Recruit said the building was aging and so
it has decided to sell and rent, we see this as proof that
Recruit must be in trouble. The firm has lost a huge amount
of revenue over the last 5 years to internet firms such as's Tabelog, and -- and it's starting to
show. Recruit has two more buildings left. If it sells
either by the end of the year, then you know that the end
is probably near for the former high-flyer. (Source: TT
commentary from, Jan 28, 2012)

NOTE: Broken links
Many online news sources remove their articles after just a
few days of posting them, thus breaking our links -- we
apologize for the inconvenience.


----------- Changing Japan's Corporate Governance ---------

If there ever was a time to support for the improvement of
corporate governance in Japan, now is it. The Board
Director Training Institute of Japan (BDTI) needs only 80
more donations of 3,000 Yen each in order to qualify for
special “turbo-charged” tax treatment. If it can qualify,
BDTI will get greater visibility, and donors in the next
five years will receive approximately double the tax
benefits they now receive. Please help!



=> BiOS, a Division of the LINC Media group, is actively
marketing the following positions for customers setting up
or expanding in Japan, as well as other employers of


BiOS is urgently looking for a Bilingual Desktop Engineer
with desktop or user support experience, preferably within
a multinational environment, to work at our client’s office
in the Yokohama area. The candidate will be responsible for
user PC (and other office hardware) support, infrastructure
troubleshooting, and IT hardware asset management. You will
also be responsible for AD/Exchange account management,
user manual production, and onsite client communication.

Due to the technical nature and demanding work environment,
this position is suitable for someone with solid experience
of at least two years in a desktop or user support role,
preferably in a multinational environment. In addition,
since this role requires direct coordination both in
English and Japanese, business-level English and fluent
Japanese will be required.

Remuneration is JPY4.5m – JPY5.5m depending on your
experience and skill level.


- Backup Engineer, BiOS, JPY4M – JPY5M
- Project Manager (Osaka), global telco., JPY6M – JPY8M
- Junior Account Mgr IT Outsourcing), BiOS, JPY3M – JPY4M
- Technical Support Engr, global pharma co, JPY4M – JPY5M
- Field Engineer, global IT co, JPY6M – JPY8M

Interested individuals may e-mail resumes to:

** BiOS Job Mail

Every 2 weeks BiOS sends out a regular communication to its
job seeking candidates, called BiOS Job Mail. Every edition
carries a list of BiOS's current and most up-to-date
vacancies, with each entry featuring a short job
description and a direct link to the main entry on the BiOS
home page. Regardless of whether you are unemployed and
searching, thinking about a career change, or just curious
to know if there is something out there that might suit you
better, the BiOS Job Mail newsletter is an easy and
convenient way for you to stay informed. If you would like
to register for the BiOS Job Mail, or to find out more,
please email

Interested individuals may e-mail resumes to:


--------- BIOS - Bilingual IT Systems and Support ---------

BiOS full-service IT solutions has a new service.

Now the largest independently owned bilingual IT support
company in Tokyo, BiOS offers some of the most competitive
services available to multinationals whether large or

Data Center staff and managed services, Help Desk, desktop,
and network support. Server virtualization, cloud computing
hosting and solutions, general software development.

For more information on these and other SI and IT services,
in English or Japanese:

Phone: (03) 4588-2220, Email:



----------------- Start a Company in Japan ----------------

Entrepreneur's Handbook Seminar 18th of February, 2012

If you have been considering setting up your own company,
find out what it takes to make it successful. Terrie Lloyd,
founder of over 17 start-up companies in Japan, will be
giving an English-language seminar and Q and A on starting
up a company in Japan.

This is an ideal opportunity to find out what is involved,
and to ask specific questions that are not normally
answered in business books. All materials are in English
and are Japan-focused.

For more details:

----------------- ICA Event - February 16 -----------------

Speaker: James Hollow
Title: Harness Social Media for your Business - for Free

Details: Complete event details at
(RSVP Required)

Date: Thursday, February 16, 2012
Time: 6:30 Doors open, Drinks and Snacks
Cost: 2,000 yen (members), 3,000 yen (non-members)
Open to all, venue is Wall Street Associates

--------------- TiE Entrepreneurial Event -----------------

TiE-Japan is hosting Singapore venture capital firm
Infocomm Investments ( on 30th Jan
from 7PM to 10PM at a central Tokyo location. Startups are
encouraged to attend this event.

Infocomm Investments is looking to invest in Japanese
companies. Ten companies will be given an opportunity to
pitch to them between 7PM to 8:30PM. The companies that
will be pitching should be making revenue today.

A networking event will be held from 8:30PM to 10PM. Light
food and drinks (Soft drink + Alcohol) will be served. All
startups are encouraged to attend the networking session
and get time to talk to Infocomm Investments in person.

Please RSVP to

------------- Tokyo Teacher Training Academy --------------

Starting from February. For each program, workshops are
held once a month on Sundays in central Tokyo.
Programs offered: TESOL Certificate, TESOL Certificate
(Young Learners)
Trainers include: David Paul, Rob Waring, Alastair
Graham-Marr, Robert S. Murphy




In this section we run comments and corrections submitted
by readers. We encourage you to spot our mistakes and
amplify our points, by email, to

*** In a number of recent issues we have speculated about
the involvement of the Yakuza in large Japanese firms.
This last week we received an interesting insight into
what is likely going on at Olympus and JTI (Japan
Tobacco's international subsidiary), from a very well
placed and of course anonymous source in Japanese banking.

=> Reader comments:

"From what I hear -- and even if I hadn't heard anything
one could figure it out -- the Japanese authorities are
trying to bury the Olympus scandal. Concerted and serious
effort is being made to ensure Yakuza involvement is
hidden, and the entire thing is blamed on a few rotten
apples in Olympus and is reduced to merely being a case of
run-of-the-mill accounting fraud. Some cops are still
trying to investigate, but they are shoveling against the
tide - and a rather strong tide at that. The DPJ is
determined to suppress the Olympus scandal -- and certain
powerful politicians appear to be working directly on the
behalf of Yakuza interests.

Ironic in many respects -- not least the October 1st, 2011,
passage of the Organized Crime Exclusionary Provisions law
in the Diet, I never considered Japanese authorities (even
law enforcement) to be serious about hurting the Yakuza.
It's all just for show. Olympus handed the authorities a
golden opportunity to really strike a blow, but instead
they appear to be actively engaging in a cover-up. Nothing
has changed -- and probably never will. Remember the
previous scandals -- Tanaka - ANA/Lockheed, Recruit,
Nomura, Livedoor, etc. They were all supposed to signal a
sea change in Japan but in the end had no effect whatsoever.
Japan's ruling class continues to run the country as if
it's a racket intended to ensure their own well being.

A country rarely gets a chance to fix itself. Olympus is
the latest opportunity, and it's not just being squandered
-- it's being strangled in fact.

On the US side, you have FBI white collar squad determined
to keep the Olympus case in their jurisdiction. Thus, they
have also been suppressing and ignoring clear evidence of
Yakuza involvement --- since that would require them to
either share (or even turnover) the case with the Asian
Organized Crime squad. Amazing, ain't it? President Obama's
executive order last summer designated the Yakuza as one of
the world's four most serious organized crime groups, and
called for a concerted effort against the Yakuza. But it
just lip service. The US Government and the FBI have a
golden opportunity to expose Yakuza activity through this
case and do some real damage. However, once again they are
intentionally doing nothing. I don't know what the British
are up to, but given Japan's importance in the Eurozone in
coming months, I doubt they'll do much.

Oh, and the Japan Tobacco scandal is in many respects even
worse than Olympus. But it's being ignored by both the
Japanese press and Japanese officialdom.

All in all, were I a Yakuza in Japan, I would be sleeping
soundly at night."


SUBSCRIBERS: 8,300 members as of Jan 29, 2012
(We purge our list regularly.)


Written by: Terrie Lloyd (

HELP: E-mail
with the word 'help' in the subject or body (don't include
the quotes), and you will get back a message with

Send letters (Feedback, Inquiries & Information) to the
editor to

For more information on advertising in this newsletter,

Get Terrie's Take by giving your name and email address at, or go
straight to Mailman at:


Copyright 2012 Japan Inc. Communications Inc.

----------------- Japan Inc opens up Japan ----------------

J@pan Inc is Japan's only independently published English-
language business website. Authoritatively chronicling
online the business trends in Japan, each posting brings
you in-depth analysis of business, people and technology in
the world's second largest economy.

Visit for the best business insight on
Japan available.

Terrie mailing list