GFIA Travel, affiliated with KK Nozawa Hospitality, are the most trusted real estate partner in the amazing Nozawa Onsen village. We caught up with GFIA's Lena Leong to discuss their history, the current state of the market, and importantly, what's coming next!
About GFIA Travel
What is your background and experience in the real estate market in Japan?
We are affiliated with KK Nozawa Hospitality, the largest accommodation provider in Nozawa Onsen, Japan. Nozawa Hospitality has acquired and renovated properties in the village for its own portfolio and for others for more than a decade now.
What’s your ‘story’?
In 2009, a Singapore-based family office was looking to buy real estate in Japan, simply because it seemed like a bargain at the time! After a lot of research, they decided to focus all their investment in Nozawa Onsen. From an investor’s perspective, it has a well-run, long-established ski mountain, an unmatched sporting pedigree, almost as many guests in the green season as in the winter, and is easily accessible from Tokyo.
Gradually the project morphed from a simple passive investment, to a professionally managed accommodation business dedicated to helping guests enjoy our wonderful village. Given that the hospitality business inevitably requires a lot of real estate, the company’s real estate expertise has gradually developed in tandem.
What do you love most about Nozawa Onsen?
The people and the seasons.
This is a real place, more like a traditional Alpine destination than most purpose-built resorts. 3,500 people live here, most of them farmers. But you’ll find 14 living Olympians amongst them, countless national and international athletes, and, more recently, a few dozen foreign artists and business people living here permanently. For a small mountain village, it’s a very “alive” place!
Every season is a joy. And remember that Japan, traditionally, doesn’t have four seasons, it has 24 (or 72, depending how you count them)! Every day on the mountain brings a different experience.
What has been your greatest project to work on?
Each project seems, at the time, to be the greatest. In a compact and ancient village, every project has its own constraints and challenges, and every project therefore has its own unique satisfaction once it’s complete.
What’s the hardest part about your job? And what is the easiest?
The easiest is going to work in the morning.
The hardest is – sometimes – managing the very different culture that we need to adopt to get things done in a traditional mountain village, alongside the international backgrounds of many of the clients that we deal with.
The Nozawa Onsen Property Market
What makes Nozawa Onsen attractive to investors?
It’s an amazing destination anyway, that by the way has an Olympic-quality ski resort.
It’s easily accessible from Tokyo (just over 2 hours door-to-door from Tokyo station).
It’s a pressure-cooker – there is a finite amount of property in the village and there is nowhere for the village to expand to.
And it’s beginning to be well-recognised. 10 years’ ago we always started each conversation by showing folks where Nozawa Onsen was on the map… thankfully that's no more! But equally, it is far from being fully developed.
There is a small but steady supply of properties popping up every year, so patience is usually rewarded.
What is the most exciting thing coming to Nozawa Onsen in the near future?
GFIA Travel and Nozawa Hospitality are working together to create the first strata ownership vacation condominium project in the village, to luxury international standard with full facilities. And of course overseas owners will have full, clean title as well as generating some yield from their investment.
Where do the opportunities lie in Nozawa Onsen?
There are over 200 accommodations in the village, from 3-4 room pensions to mid-size hotels; and perhaps 1,000 individual dwellings. Very few have yet been renovated to international standard. Although renovation is a skilled job and of course requires capital, your yield on a renovated property is a multiple of unrenovated, and that’s what we see as the “kicker” to real estate in the village.
What needs and wants do your clients have that might differ from other areas of the world?
People wanting to own in Nozawa are generally in love with the village already. They want to feel part of the community, and to understand and respect its traditions. They are keenly aware that their investment must contribute to the sustainability of the village.
What is happening next?
How has the market held up through the pandemic?
It has been roaring ahead. Although almost all transactions are private and the terms confidential, we’ve seen asking prices more than double in the last 18 months, and a noticeable uptick in the number of transactions.
What changes has it caused?
There are a lot of unwritten, but nevertheless well-respected and powerful, rules about real estate in the village; with the number of non-local buyers who aren’t familiar with the rules, the village is getting stricter at proactively enforcing these rules.
The level of activity has been such that many villagers report being cold-called with offers to sell their properties.
Do you think the needs and wants of your clients have changed due to the pandemic?
Real estate buyers want the same thing: their own piece of paradise, with a bit of yield.
Conversely accommodation guests (who ultimately support real estate yields in the village) are moving towards apartments, single-key lodges, and rental villas, as well as the more traditional dinner-bed-breakfast hotel/pension style. It’s particularly noticeable in the green season, where Japanese guests are much more adventurous in the type of accommodation they want, than even two years ago.
What exciting changes are coming to Nozawa Onsen in the next few years?
Every year the amount of investment in the village amazes us. Whether it’s the ski resort building a new high-speed gondola, whether it’s one of our clients spending several million dollars to create a top-class hotel, whether it’s private money building a new distillery (watch this space), or a new crafts workshop (and this space too!), or whether it’s the village opening a new pottery museum… there’s a never-ending stream of increasing attractions here. So let’s see what the next slew of exciting changes might be!
Hot Tips for Buyers
What are a few crucial things to consider for a foreigner looking to invest in Japan?
Japan is different… but it works. Let your local advisors guide you and don’t be frustrated if it things work differently from back home.
What are the mistakes to avoid when investing in Japan from abroad?
Especially in a rural area, money is less important than relationships. As an outsider, you can’t just throw money at a problem and fix it. You may be the richest guy at the table but that does not make you the most important person there.
Do you have any properties available now that are particularly unique or exciting?
There’s always something available in the village for entrepreneurial investors, but what is exciting us most is Nozawa Hospitality’s vacation condominium project that’ll come up early next year.
Any other tips or comments for people visiting UchiJapan.com?
Japan is the tourist destination for Asia. It’s safe and clean, transport is easy, there’s history, there’s modern culture, there’s amazing cuisine, and it’s politically stable. Plus as a real estate investor you own perfect title, no different to a Japanese owner.
So if you’re going to buy a vacation property anywhere in the region, Japan is your blue-chip destination.