New-Build Apartment on Owned Land: Economics and Pitfalls

1. Key points

Ground-up apartment planning when you already own the land. Timber vs light-steel per-tsubo build cost, expected yield, master-lease risk, estate-tax valuation compression, and the classic ways deals go wrong.

2. Background & context

The market environment and regulatory backdrop shape how this topic plays out. Individual land conditions can shift the conclusion, so treat the notes below as general guidance.

3. Numeric simulation

Run the numbers on your own conditions. Key inputs are equity ratio, gross revenue and operating cost, financing terms, and after-tax cash flow.

• Initial investment and equity ratio
• Annual revenue and operating cost estimates
• Loan terms (rate and tenor)
• After-tax cash flow

4. Decision framework & checklist

1. Level of profitability (yield, CF, IRR)
2. Resilience to risk (occupancy, regulation, tariff changes)
3. Exit strategy (ease of withdrawal, land reuse)
4. Fit with your profile and land constraints

5. Common pitfalls

Never rely on headline numbers alone. Stress-test the deal against occupancy, repair, tax, and regulatory changes.

6. Summary

With RE/ANALYSIS you can input the land conditions and get these metrics auto-calculated in seconds.