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Analyzing the overconcentration in Tokyo
(Dec.14, 2006)

I participated in a business seminar for CEOs of real-estate companies in Tokyo. There were about 300 participants, all of whom maintained their offices in the greater Tokyo area. We discussed the recent jump in land prices, especially that in the urban center of Tokyo. Some participants said that this circumstance was nothing but the second coming of the economic bubble. 　 Others said that credit institutions had changed their attitudes altogether and they had prompted a rigorous check of the validity of the loans. The jump in the land prices is reflected in the jump in the rental rates of office buildings and condominiums. The overconcentration in Tokyo seems to have started again.

I tried to make a small analysis of the addresses of the participants of the seminar. Where are the central offices of their companies? I was astonished by the result of this analysis. It turned out that the overconcentration in Tokyo is more serious than I expected. The result of my analysis is as follows:

Q. Where is the central office of your company located?
A. In Chiyoda-ku (30%); Chuo-ku (16%); Shibuya-ku (11%); Yokohama or Kawasaki (10%); Shinjyuku-ku (8%).

There were almost no CEOs whose companies had the central offices in Shinagawa-ku, Saitama, or Chiba. This is surprising. The 80% of the CEOs answered that their central offices were located in Chiyoda-ku, Chuo-ku, Shibuya-ku, Shinjuku-ku, that is, the main four districts of the urban core of Tokyo. Surprisingly, there were almost no CEOs who answered that their central offices were located in Chiba or Saitama. The only exception is me. JSB's central office is located in, as you know, Urayasu city of Chiba.

This analysis is, of course, not a big deal. However, its result is enough to raise eyebrows. The overconcentration in Tokyo is observed not only in habitat selection, but also in central offices selection. I have once pointed out that most of the companies which have recently listed have their central offices in Tokyo. This is definitely not a healthy tendency. My analysis shown above bears out this tendency. 　

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