Target 2028: A Deep Dive into the Kochi City Central Revitalization Plan and New Real Estate Investment Opportunities

The "Third Basic Plan for Central City Revitalization" promoted by Kochi City is now drawing significant attention from real estate investors. This ambitious urban renewal project, targeting completion by 2028, aims to tackle the challenge of population decline—a common issue for Japan's regional cities—and build a sustainable urban environment. In particular, the redevelopment of the area around Kochi Station, the city's main gateway, and the Obiyamachi area, its traditional commercial heart, is centered on expanding the visitor and commuter population and creating new vibrancy. These efforts hold the potential to bring about structural changes in the real estate market.

However, the impact of such large-scale redevelopment plans on real estate values varies greatly depending on the area and property type. To accurately assess future growth potential, it is essential to analyze the market from multiple perspectives, considering both macro-level urban planning trends and micro-level real transaction data.

In this article, we will conduct a thorough analysis from a veteran analyst's viewpoint, exploring the new real estate investment possibilities in Kochi City opened up by this redevelopment. Our analysis is based on proprietary real estate transaction data for the Kochi Station area (period: 2021–2025) acquired by Mekiki Research. Let's delve into the market realities revealed by the data and decipher the outlook for the future.

1. Population Decline and the Challenges Facing Central Kochi City

Like many regional cities in Japan, Kochi City in Kochi Prefecture is facing the structural challenges of a declining birthrate, an aging population, and overall population decline. According to estimates by the National Institute of Population and Social Security Research, Kochi City's population is projected to continue its downward trend, raising concerns about a decline in the vitality of its central urban area. The "hollowing out" of the city center—characterized by the withdrawal of commercial facilities, an increase in vacant storefronts, and an outflow of residents to the suburbs—risks diminishing the city's appeal and creating a vicious cycle of further population loss.

To break this cycle and pass on a sustainable and attractive city to the next generation, Kochi City has positioned the revitalization of its central urban area as one of its highest priorities. The plan goes beyond mere building updates and infrastructure improvements. Its core strategy is to promote both "residency" and "interaction" in the city center by creating a "walkable" city where citizens and visitors can gather, interact, and spend time comfortably. The success or failure of this initiative will be a critical turning point that will significantly influence the future real estate values of Kochi City.

2. The Three Pillars of the "Third Basic Plan for Central City Revitalization"

The "Third Basic Plan for Central City Revitalization," with a planning period extending to March 2028, is built on the following three fundamental pillars:

1. Creating a city where diverse people gather, interact, and thrive

   • Establish spaces where diverse generations, including young people, women, and seniors, can play an active role.
   • Foster an environment for new businesses to emerge through startup support and the development of co-working spaces.
   • Increase the business-oriented visitor population by enhancing MICE (Meetings, Incentives, Conferences, and Exhibitions) functions.

2. Creating a city that encourages movement and generates vibrancy

   • Improve the convenience of public transportation and develop pedestrian-friendly spaces (walkable city initiatives).
   • Strengthen the links between key hubs (Kochi Station, Obiyamachi, Kochi Castle, etc.) to create an environment where visitors can enjoy exploring the city on foot.
   • Revitalize the nighttime economy by hosting events that leverage history and culture and by improving the nighttime landscape.

3. Creating a safe, secure, and comfortable city for long-term living

   • Promote residency in the city center by supplying high-quality housing and enhancing childcare support measures.
   • Strengthen disaster preparedness functions in readiness for large-scale disasters such as the Nankai Trough Earthquake.
   • Develop an urban environment where everyone can feel comfortable through the introduction of universal design principles.

Public and private sectors will collaborate to advance specific projects aimed at achieving these goals. As an investor, it is crucial to carefully monitor which areas these policies will affect and in what ways.

3. Key Projects: The Transformation of the Kochi Station and Obiyamachi/Ohashidori Areas

Under the current revitalization plan, the "Kochi Station area" and the "Obiyamachi and Ohashidori area" are expected to undergo particularly significant transformations.

The Kochi Station area serves as the city's primary "land gateway." According to Mekiki Research data, JR Shikoku's Kochi Station is a major transportation hub with an average of 10,176 passengers per day. This area is zoned as a Commercial Zone, with a building coverage ratio (BCR) of 80% and a floor area ratio (FAR) of 400%, giving it high development potential. The plan aims to enhance its function as a welcoming gateway that smoothly guides visitors into the city center by redeveloping the station plaza and improving surrounding roads. The attraction of MICE facilities and the construction of high-function hotels are also being considered, which is expected to further elevate its status as a hub for both business and tourism.

Meanwhile, the Obiyamachi and Ohashidori area is a long-established commercial district centered around an arcade shopping street. In this area, renovation projects utilizing vacant storefronts and efforts to attract new, appealing tenants will be promoted. The goal is to transform it into a "fun-to-walk city" by expanding pedestrian spaces and installing well-designed street furniture, which is expected to increase visitor dwell time and boost consumer spending. These developments will have a direct impact on rental rates for street-level shops and the asset values of commercial buildings.

4. The Impact of the Visitor Growth Strategy and Enhanced Tourism/MICE Functions

A key to the success of this plan is "expanding the non-resident population," which includes tourists and commuters. Kochi City is strengthening its efforts to attract domestic and international tourists by leveraging its rich natural environment, culinary culture, and historical resources. As inbound tourism begins to fully recover, it is imperative to develop the necessary infrastructure to accommodate visitors, in conjunction with the resumption and expansion of international flights at Kochi Ryoma Airport.

In addition, strengthening MICE functions will create new demand in the real estate market. Hosting large-scale academic conferences and international meetings will cause a surge in demand for accommodations, boosting occupancy rates for hotels and traditional inns (ryokan). This not only directly improves hotel profitability but also has a significant economic ripple effect on surrounding restaurants and retail stores, thereby increasing the value of commercial real estate.

Furthermore, these business visitors may become repeat visitors or tourists after experiencing Kochi's charms. In the medium to long term, this could also stimulate demand for residential properties catering to medium- to long-term stays, such as weekly apartments and serviced apartments. The increase in the non-resident population has the potential to deliver sustained positive effects across various real estate sectors, going beyond the temporary impact of one-off events.

5. Area-by-Area Forecast of Redevelopment's Impact on Land and Rent Prices

So, how will these redevelopment plans affect actual real estate prices? Let's analyze the transaction data for the Kochi Station area from Mekiki Research.

First, an overview of the central Kochi City market. A total of 3,959 transactions were confirmed over the five-year period from 2021 to 2025, indicating a reasonable level of market liquidity.

What stands out here is the significant gap of approximately ¥5.3 million between the average transaction price (approx. ¥20.3 million) and the median transaction price (¥15.0 million). This suggests that a few high-value properties, with the highest transaction reaching ¥720 million, are skewing the overall average. For investment decisions, it is crucial to consider the median price, which more accurately reflects the typical market, rather than just the average.

A look at individual transaction examples reveals clear price differences based on area and property characteristics.

• Residential property (land and building) examples:
  • A recently built (2021) wooden house (100 m²) in Azono-Nishimachi sold for ¥31 million in 2021.
  • In contrast, an older (1972) wooden house (130 m²) in Akebonocho was transacted for ¥12 million, showing that the age of the building significantly affects the price.
• Residential land (land only) examples:
  • Even within the same neighborhood of Asakura-Yokocho, a 50 m² parcel of land sold for ¥3.6 million (unit price of ¥72,000/m²), while a 145 m² parcel sold for ¥18 million (unit price of approx. ¥124,000/m²), indicating that the unit price varies greatly depending on size and other conditions.

When forecasting the impact of redevelopment, these area-specific characteristics must be taken into account. In areas close to Kochi Station and Obiyamachi, upward pressure on land prices is likely to increase due to improved convenience for commercial use. In particular, areas zoned for a certain level of development, such as Category 1 Medium-to-High-Rise Oriented Residential Zones (BCR 60%, FAR 200%) and Neighborhood Commercial Zones (BCR 80%, FAR 200%), may see an accelerated rise in land prices as redevelopment spurs demand for condominium and commercial building sites.

6. Should Investors Focus on Commercial or Residential Properties?

As redevelopment progresses in Kochi City, what types of properties should investors focus on? Let's analyze from the perspectives of both commercial and residential properties.

Investment in Commercial and Business Properties: The biggest advantage is that these properties are likely to benefit directly from redevelopment. The Commercial Zone (FAR 400%) around Kochi Station, in particular, is expected to see increased foot traffic, making rental growth for retail and office spaces a strong possibility. The data includes an example of a mixed-use "residence and shop" property in Atagoyama that sold for ¥25 million, indicating existing demand for properties that combine living and working spaces. Hotels and guesthouses targeting the recovery of inbound tourism, as well as rental conference rooms catering to MICE-related demand, are also promising investment targets. However, investors must also consider risks such as vulnerability to economic fluctuations and the broader shift toward online consumption.

Investment in Residential Properties: The revitalization of the city center enhances the convenience of "work-life proximity," stimulating demand for housing. Demand is particularly expected from child-rearing households and seniors seeking to move back to the urban core. According to Mekiki Research data, the area falls within the school districts for Harimayabashi Elementary School and Atago Junior High School, and is home to 33 medical institutions (including Hisashi Hospital and Chikamori Orthopedics and Rehabilitation Hospital). The abundance of such lifestyle amenities is a powerful factor that supports the value of residential real estate. A diverse range of rental demand can be expected, from studio apartments for single occupants to condominiums for families. While residential properties are generally less affected by economic fluctuations than commercial ones, the long-term risk of demographic shifts should be noted.

In conclusion, a general guideline would be to target commercial properties for higher returns and residential properties for stable income gains. However, mixed-use properties that combine the characteristics of both could also be an interesting option.

7. What About the Nankai Trough Earthquake? A Look at Disaster and Hazard Risks

When considering real estate investment in Kochi City, the perspective of disaster and hazard risk is one that absolutely cannot be ignored. Preparing for the Nankai Trough megaquake, which is feared to occur in the future, is critically important for preserving asset value.

Let's look at the hazard information provided by Mekiki Research. The Kochi Station area, which is the focus of our analysis, has no identified risk of landslides. This is because it is located on a plain away from mountainous areas, which is one reassuring factor.

However, a serious warning is indicated for flood risk. According to the data, this area is located within a government-designated flood inundation zone, with a maximum anticipated inundation depth of "3 to 5 meters." This is a severe level, suggesting that the first floor of a typical two-story house could be completely submerged, with water potentially reaching near the floor of the second story.

This risk cannot be taken lightly. When selecting an investment property, the following points must be confirmed:

• The height and structure of the building's foundation: Is the structure resistant to flooding, or is it built on stilts?
• Securing evacuation routes: Check local evacuation sites and routes in advance.
• Location of electrical equipment: If power receiving equipment and distribution boards are on the first floor, the risk of functional failure due to flooding is high.
• Insurance coverage: Does the fire insurance policy include flood damage coverage, and is the coverage adequate?

As an investment strategy, one could consider choosing properties designed with countermeasures, such as those with a ground floor used for parking (piloti-style), with living spaces and essential equipment located on the second floor or higher. Understanding the hazard risks correctly and taking appropriate measures are essential conditions for long-term, stable real estate investment in Kochi City.

8. Conclusion: A Strategic Approach to Kochi City Real Estate Investment Towards 2028

The "Third Basic Plan for Central City Revitalization" promoted by Kochi City is a major project with the potential to significantly transform the city's future. The expansion of the visitor and commuter population through the redevelopment of the Kochi Station and Obiyamachi areas will vitalize commerce and tourism, bringing new growth opportunities to the real estate market.

As the data from Mekiki Research shows, the Kochi City real estate market has an average transaction price of approximately ¥20.3 million and a median of ¥15.0 million, with prices varying significantly by age and area. To maximize the benefits of redevelopment, an effective strategy would be to monitor the plan's progress and acquire properties in areas with future growth potential ahead of the curve.

On the other hand, the severe flood risk of up to 3 to 5 meters is a challenge that cannot be ignored. To protect your assets and ensure stable returns, you must carefully examine hazard maps and select properties with robust disaster-prevention measures.

Kochi City will steadily transform as it moves toward the target year of 2028. Seizing this wave of change could lead to significant investment opportunities. However, success depends on not being swayed by superficial information but on conducting a multifaceted risk analysis based on reliable data. We encourage you to build your own investment strategy by leveraging real transaction data and hazard information like that analyzed in this article.

Explore real estate data for the Kochi Station area on Mekiki Research →