Section 1. Creating New Urban Spaces

1. The Bubble Economy and Daibiru

The unprecedented surge in the stock market and land prices of the late 1980s, which was due mainly to an ultra-low interest policy that had been implemented to counter the strong yen and boost the economy, resulted in an overheated economy that was known as the Japanese asset price bubble. The Nikkei stock index exceeded 38,000 yen at the end of December 1989, and land prices had risen to unheard-of levels. Within Greater Tokyo, official land prices for residential property more than doubled during the two years from 1986 to 1987. Within Tokyo’s special wards, the increase was nearly threefold. It was much the same around Osaka and Nagoya as well. However, when the Japanese government began tightening its monetary policy and imposing restrictions on the total amount of land-financed loans, asset prices began to fall and the bubble burst. Due to the sudden drop in stock prices and a major decline in land prices—especially the metropolitan areas—Japan fell into a protracted recession.

Most companies suffered from the collapse of the asset price bubble, but Daibiru was able to minimize the impact by remaining calm during the overheated real estate market and refraining from over-investment while prices were inflated.

Since the bursting of the asset price bubble, Daibiru has adopted a policy of concentrating its investments in Tokyo and has diversified to include the acquisition of existing properties and large-scale renovation projects in addition to new building construction.