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11 new units Nov. 2005

Misonocho Eleven

This is an artist’s rendition of a block of eleven units that will commence construction November 2005. A single investor who has secured 60% finance from a Japanese bank will own the project. The total investment required is JPY120, 000,000. The yield is calculated at 6.5%.

It is important to keep in mind that before we start each new project we must decide the focus of the project. We need to ask who we intended to market these apartments to when we purchased this piece of real estate. In the case of this investment each unit will be a one-bedroom apartment of between 29 and 33 square meters and fitted out as luxuriously as the budget allows. While we are on this point it explains why as a group we stay away from previously developed one bedroom complexes made up of the more traditional 15 square meter all in one room approach that is so common in Japan.

We have allowed separating the bathroom, washroom, and toilet from the main living area, which is comprised of a living room, kitchen and closet space. In earlier years this style of one bedroom apartment would have been considered spacious and luxurious. We believe that without this space and separation between the living spaces will have difficulty marketing this building just a few years from when it is complete. Each apartment will include a reverse cycle air-conditioning unit, optical internet connection and be fitted with a video screen plus auto entry switch that access the main entrance camera and auto lock system. Casual visitors to the building will only gain access by invitation of a tenant via the security system.

The project will stand approximately 12 minutes walk from Kawanishi Hankyu and JR stations and is within very easy striking distance to university campus of 1,800 students. We expect that 24 months rental leases will be the mainstay of income for this real estate project.

We expect that this real estate project will be fully rented prior to completion in March 2006.

Photo 2
The KTI building team moved onto this real estate development the 24th October 2005. First job is site preparation for trench digging. The trenches are dug to a depth and width of 1.5 meters. On this project we have zoning permission to cover up to 60% of the block with our building and build a maximum of 200% the land size in the actual building structure. That's quite a bit of building going onto this 198 square meter block of land. In total this investment property will end up with eleven one-bedroom apartments each of between 29 and 33 square meters in size.

Photo 3
The trenches have been dug and we begin to see the layout of this building. Upon completion of digging a 100 mm skim of concrete is laid down. The purpose of this skim is simply to provide a solid base to lay down the reinforcing mesh into the trenches. In this photo we can see the vertical stanchions that will be used to anchor the vertical members of the main steel frame. These stanchions and for that matter the entire project must comply with the strict earthquake resistance codes of Japan.

Photo 4
Wooden formwork is brought in to form up the shape of the concrete base foundations required. The work on this formwork takes one day by a team of four top tradesmen. In many ways the difference between a good return on your real estate investment and a bad return on that very same investment starts right here at the base of the building. Finding the right tradesmen that can get the job done on time at the right price using quality materials is of the utmost importance.

Photo 5
Here we see a close up view of one of the ten stanchions that will enable us to bolt the metal uprights of this property to the ground.

Photo 6
Once the outside timber formwork is in place that reinforcing steel may be laid in the trenches. The reinforcing steel will be tied into itself and those all-important vertical stanchions. Getting all the steel in place and finishing the inside formwork will take a about week.

Photo 7
The concrete is poured and we can remove the timber formwork.

Photo 8
Once the timber formwork is all removed soil that was removed from the property when trench excavations took place may be returned to the site and used to back fill the concrete footings. Backfilling the footings with soil is a cost effective method to support the weight of the concrete poured in to build the ground floor. The ground floor concrete reinforcing mesh will be tied into the rods left exposed from the footing pour thereby tying the floor into the footings.

Photo 9
The concrete is left a week to harden up and then the prefabricated steel frame is brought in by truck. It's lifted in place and bolted together on site. This process takes a day. At the end of this day the investor can step on site and for the first time get a real impression of the full project. As an investor myself this is always a very special time for me. I just love standing there and looking at that frame. I start to see the real estate investment as a dwelling that folk will be able to live in. I can imagine the rooms and the entrance. If I am brave I can even climb up those stairs and take a look from the top. This day is one of joy for most investors.

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