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Niseko Swaying in the COVID-19 Pandemic – Difficult Resort Development Part 3

Place with Potential: New Major Plans for Life after the Pandemic

The Hanazono area in Kutchan Town is attracting the most attention from investors. New large-scale development plans have been revealed with an eye on life after COVID-19.

Apex Property, a Hong Kong-affiliated real estate development company, is constructing a group of luxury chalets called “Hanaridge” along the Iwaobetsu Minami 3-sen town road extending from the town center to the Hanazono area and on the way to Park Hyatt Niseko Hanazono. All 12 plots to be developed on the 2.5-ha site were sold out before the spread of COVID-19.

The company is now planning to develop another group of resort villas referred to as “Hanacreek” consisting of 68 plots on a 17-ha site across the town road from Hanaridge. In addition to residential lots, a clubhouse with commercial facilities will be built, and all plots will be completed by the end of 2025.

Sylvia Tang, the co-owner of the company, sees great potential in the developing the Hanazono area compared to Hirafu, Niseko’s busiest ski area. According to the project team she leads for Hanacreek, it is attractive to be able to secure a large section in Hanazono amid the COVID-19 pandemic. Furthermore, they feel high value in the convenience of being close to the new Hokkaido Shinkansen Kutchan station and the expressway entrance, which are planned to be developed within the next 10 years.

The relatively cheap land price also boosts new developments. Tomoya Sagawa, sales manager of real estate business Danshaku Property in the town, said, “A few years ago, land price in Hanazono was about one-twentieth of the center of Hirafu. It seems to be about one-seventh to one-fifth even after the construction of Park Hyatt.”

In the area, Hong Kong real estate development company Pacific Century Premium Developments will embark on the “Hanazono South Village” plan to build 11 hotel and other buildings on an area of 6 ha adjacent to the Park Hyatt. Hong Kong-affiliate Super Okusan also plans to develop about 30 villas on the surrounding 6-ha land. Niseko Realty Principal Craig Meikle points out that “the asset value is expected to rise in the next few years as multiple developments progress. Hanazono is a promising investment destination.”

However, the development plans for the Hanazono area are not unaffected by the COVID-19 pandemic. The site preparation for an accommodation and commercial facility planned by Long Forest Development Limited, which had been established by Asian investors, was scheduled to begin in the summer of 2020, but the scale and start of work are being reviewed due to the inbound decline. The development of Hanacreek is also a few months behind its original plan.

Furthermore, even if the COVID-19 pandemic is improved, there are still issues with the progress of construction: severer labor shortages.

The building of the Hokkaido Shinkansen and expressway have already created a significant scarcity of workers in Shiribeshi Subprefecture. This may be combined with not only the development of new resorts but also the resumption of projects that were suspended or postponed in 2020. A construction company involved in development heighten the sense of crisis, saying it may become more difficult to procure labor.

Niseko has developed as an international resort by overcoming socio-economic difficulties such as the bankruptcy of Lehman Brothers and the Great East Japan Earthquake. “It has also overcome the unprecedented disaster of COVID-19.” To receive such a recognition in a few years and to make a further leap forward, Niseko now faces a crucial moment.

(Excerpt from an article on December 24, 2020)

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