Nomura Real Estate Tries to Attract EV Drivers With New Condo

(Bloomberg) -- Nomura Real Estate Holdings Inc., one of Japan's biggest listed property developers, sees electric vehicles as one key plank to its green building push.

The company is constructing what it says is Japan's first fully emissions-free condominium powered by gas and electricity -- a high-rise luxury residential tower in Sagamihara, a city about an hour's drive from Tokyo. Every parking spot in the building's three-level basement will have its own electric-car charging point and the garage will also feature spare chargers for visitors.

Artist rendering of Nomura Real Estate's emission-free condominium.Source: Nomura Real Estate

"Electric cars will be widely adopted in the future,†Tetsumi Yoshimura, an executive officer at Nomura Real Estate, said. While EV penetration in Japan will still be low by 2025 when the condo is expected to be finished (it''s running at about 1% currently), it's crucial to set up the hardware now for an EV era,"he said.

Home charging points are becoming an essential part of the global EV push. Last month, U.K. Prime Minister Boris Johnson said all new homes and buildings will be required to have EV charging points from next year as England readies to ban the sale of new gasoline and diesel cars by 2030. Japan has said it will go carbon neutral by 2050. EVs will be a big part of that but like in other places, there aren't many EV charging stations, putting consumers off making the shift.

Nomura Real Estate isn't the only homebuilder going green. Sekisui House Ltd. has also pledged that all new condos sold in 2023 or later will be emissions free, in line with the government's goal to reach net zero energy consumption for newly constructed houses by 2030.

"For developers, it's an inevitable move," said Junichi Tazawa, a senior analyst at SMBC Nikko Securities Inc. As the share of zero-emissions homes increases, condos that don't meet those standards will become less popular, he said, similar to how residential towers with earthquake-absorbing features weren't big sellers in the early 2000s until a slew of quakes hit the country.

The pricing of apartments in new green buildings though must be competitive, Tazawa said. Nomura Real Estate, which is also working on two smaller emissions-free condos in greater Tokyo, hasn't released pricing for its 680-strong apartment Sagamihara project.

While adding EV charging points to new residential buildings is much easier than retrofitting older ones -- an issue in Japan where many people live in densely packed apartments -- not everyone agrees the ability to charge up at home is especially environmentally friendly.

Japan is still largely dependent on fossil fuels for electricity generation. The world's biggest automaker, Toyota Motor Corp., argues, for example, that hybrids, plug-in hybrids and hydrogen cars will play an important role alongside EVs when it comes to reaching carbon neutrality.

Regardless, the government is trying to promote the use of EVs, doubling subsidies to as much as 800,000 yen ($7,000) and planning to boost the number of charging stations nationwide to 150,000 by 2030. The country's national parks also waive charges for electric and fuel-cell cars.

Tesla Inc. also earlier this year cut the price of the longer-range version of its Model 3 in Japan by around 25% while Subaru Corp. unveiled its first EV last month.

With people often living in an apartment for decades at a stretch, Nomura Real Estate's Yoshimura says the developer is content to play the long game. Green condos like these will have "an economic advantage in the future," he said.

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