Teleworkers and entrepreneurs find a nest
By Noriko Takezaki

The business of renting out office space has become popular in the Tokyo area, owing to the increase in start-up companies which need their own office space in good business locations at reasonable prices. Some of these rental offices have now begun to target major IT companies in Japan to host their employees' teleworking activities. Computing Japan takes a look at who's renting what, where, and for how much.

Rental offices are roughly divided into two types -- residential and drop-in. Residential offices typically provide a small office space with desk, chair, telephone, and rental PC, and often provide secretarial service in Japanese and English. This type targets both Japanese and foreign business start-ups who urgently need work space in the Tokyo area, or Japanese companies whose headquarters are located in a regional area but also need work space in Tokyo. The average rental term for this type is about one year. Companies offering residential office space include KDD Business Quarters, Japan Business Center, Servcorp and Regus.

The drop-in type usually provides a simple workspace with little more than a telephone jack and sometimes a rental PC, and targets businesspeople who require temporary use of a space to send e-mail or electronic documents to their office from a remote location. This is normally available on an hourly basis and companies offering drop-in office services include Desk@, First Step, Kinko's, and Digipit.

Residential rental offices
KDD Business Quarters offers 17-29m2 office space in Otemachi, Tokyo, with rent ranging from JPY357,000 to JPY783,000, and a returnable deposit of JPY1,071,000-2,349,000. A desk, telephone, fax, and small meeting table are included, as well as a shared conference room with audiovisual equipment (free to tenants for up to 6 hours per month). Bilingual reception services are included in the rent, and a 15% discount is available for use of KDD's international phone service. (Domestic and international telephone transfer services are not included.) Recently, these office spaces have enjoyed full occupancy -- by foreign start-ups and Japanese venture companies.

One of the current tenants, Seiji Hashimoto, a California-based telecommunication system vendor for N.E.T. Inc., plans to continue using the office space until the end of the year, and will be joined by more of his staff shortly.

The Japan Business Center, managed by Mitsui Real Estate Development and operated by the consulting firm Asia Advisory Service, offers office space similar to KDD Business Quarters, but at a lower price. Rental costs range from JPY170,000 to JPY420,000, with an initial deposit of JPY710,000-1,460,000. These prices are more competitive since the location is outside of Tokyo in Makuhari, Chiba (near Makuhari Messe - the large trade show hall). The Japan Business Center features optional business advisory services for foreign start-ups through a Tokyo-based consulting company, Asia Advisory Service, which include general business information, market research, market feasibility studies, and strategy advice. Tenants have included Micron Electronics, who in 1996 rented office space for two months in order to start their business in Japan, afterwards moving to another floor of the same building to set up their Japan office. (Unfortunately, Micron closed its Japan office earlier this year.)

Servcorp, with headquarters in Australia, entered the Japanese market in 1994. Having had eighteen years of experience in the rental office business in the US and Asia-Pacific -- including Australia, China, Singapore, and Thailand, the company is taking an aggressive approach towards the Japanese market. Currently, the company has rental office floors in six buildings in Tokyo and one building in Osaka. Featuring a stylish office environment with a marble-topped reception areas, Windows NT-based network systems, and bilingual receptionist service using a proprietary computer-telephone system, the office spaces rent from JPY250,000-2,000,000 (JPY750,000 on average).

A returnable deposit equivalent to two months' rent is required. In addition to the physical office service, Servcorp also offers a virtual office service (from JPY15,000 per week) in which Servcorp's secretaries answer calls and transfer them to a customer's remote office, home, cellular phone, or voice mail, as requested. More than half of the current users of Servcorp's rental office services in Japan are foreigners. For their expansion in the Japanese market, however, the company will target more Japanese customers and increase their office floor holdings in Tokyo to eight by the end of this year, according to International Marketing Manager Tammy Palmer.

Regus, with headquarters in the UK, entered the Japanese market in January this year, opening two rental office floors in two buildings in the Shinjuku and Kamiyacho areas. Compared to Servcorp, Regus offers similar services, though their offices are simpler and more flexible, having movable wall partitions to allow variable room sizes (and rent). Providing rental office services in approximately 240 locations in 43 countries, Regus is, for the moment, targeting multinational companies entering the Japanese market (clients in Japan include UUNet and ICI Image Data). For the expansion of their business in Japan, Regus plans to open rental offices soon in major cities around Japan, according to International Business Development Director, Paul Carter. Space rent and deposit information were not available for this article.

Drop-in rental offices
Desk@ (pronounced "descut") is located in Tokyo railway station, and is operated by Kokuyo, a manufacturer of office furniture and supplies and East Japan Railway (JR) company. They offer three types of space for rent: a small booth with glass door, equipped with desk, telephone, rental PC, and locker; a booth with a desk, telephone and rental PC; and a chair with a portable table plate and a telephone jack. For all office types, an ISDN connection is available, but the use of copier, facsimile, and desktop or notebook PC is optional. Desk@ services are available through membership only (see chart at below for prices).

 

Annual usage	Users	Fee
500 hrs	any	900,000 yen
400 hrs	20	600,000 yen
125 hrs	5	200,000 yen
30 hrs	1	50,000 yen

In the near future, Kokuyo has no plans to tie-up further with JR, but does plan to partner with building developers, according to Kokuyo's spokesperson, Yoshihiko Kitano.

First Step, located in Ginza, offers six different office booths, ranging from 3-5.5m2 in size. Monthly membership ranges from JPY54,000 to JPY120,000 in addition to a basic phone charge of JPY3,000, an initial phone charge of JPY20,000, and a common service fee of JPY6,000. A returnable deposit equivalent to one month's rent is required to start. The firm offers receptionist services (free for up to 150 calls per month, and JPY200 per call if that number is exceeded), and the use of common spaces including a kitchen and guest area. Computer, printer, facsimile, copier, and e-mail services are optional.

PC-only services
In addition to drop-in rental offices and booths, some companies offer copier and PC services. These include Digipit in Jinbocho, Tokyo, and Kinko's at Toranomon, Kyobashi, Higashi-Ginza, Shinjuku, and Yotsuya, also in Tokyo, along with four other sites in Nagoya. In addition to their usual copy, desktop publishing, and binding services, Kinko's also rent out their computers (Mac or Windows 95 PC) for JPY250 per 15 minutes (in-store location). DigiPit rents PC booths at JPY500 for 30 minutes, pretty good considering this includes a free Internet connection.

Corporate satellite offices
Major IT companies have also started using commercial rental space for setting up satellite offices for their employees. Commercial office users include Hewlett-Packard Japan and Toshiba, both of which have become members of Desk@. Satellite office users include IBM Japan, NEC and Fuji Xerox, though both IBM Japan and NEC also use commercial office space on a rental basis.

IBM Japan has 12 satellite offices and 6 drop-in offices in the metropolitan area. The satellite offices use space in commercial buildings which are equipped with room security systems, such as requiring IC cards for entry. In these rooms, basic office facilities such as telephones, PCs, desks, chairs, facsimiles, and printers are all available. The drop-in offices are located inside the IBM building in Tokyo's Roppongi district, and in Kawasaki and Yamato cities in Kanagawa, albeit with much more basic equipment. IBM Japan started their trial use of satellite offices in 1995, and currently some 4,000 staff in sales and systems engineering from the Hakozaki office in Tokyo are entitled to use the satellite offices. According to an IBM Japan survey, 67% of satellite office users say they have increased their work efficiency, by 15% on average. IBM Japan plans to offer use of their satellite offices to other division employees in the near future.

Noriko Takezaki is senior editor at Computing Japan.

Tokyo rental office providers

KDD Business Quarters Phone: 03-3243-9180 http://www.kcom.ne.jp/services/f_si_e.html

Japan Business Center Phone: 043-297-3131 http://www.jbc.gol.com/

Servcorp Phone: 03-5288-5100 (Marunouchi, Tokyo) http://www.servcorp.net

Regus Phone: 03-5326-3000 (Shinjuku, Tokyo) http://www.regus.com

Desk@ Phone: 03-5293-9450 (Tokyo Station) http://www.kokuyo.co.jp/desk/

First Step Phone: 03-3573-8411 (Ginza, Tokyo) http://www.gs-net.co.jp/fs/daiwa.html

Kinko's Phone: 03-3508-2644 (Toranomon, Tokyo) http://www.kinkos.com

Digipit Phone: 03-5275-7801 http://www.digipit.apricoweb.co.jp/

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