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2025.3.25

Business

Creating New Value in Kanda: How Terrace Square and KANDA SQUARE Are Shaping a Thriving Community

Since the 1960s, Sumitomo Corporation has been involved in the development and management of multiple office buildings in the Kanda area of Tokyo. In this second installment of the "Kanda and Sumitomo Corporation" series, we focus on the large-scale mixed-use buildings Terrace Square and KANDA SQUARE, located along Kanda Keisatsu-dori. We explore the challenges faced in securing approval from local authorities to abolish a public road and relax height restrictions – obstacles that were ultimately overcome through collaborative engagement. We also hear from key people behind these projects who worked closely with the local community to bring these urban development projects to life.

  • Office Building Business Unit

    Junichi Hiramatsu

    Since joining the company in 1990, Hiramatsu has been involved in domestic real estate development. After working in Osaka on the development of residential, office and commercial buildings, he moved to Tokyo in 2005 and worked on the development of office buildings, including Terrace Square, the PREX series and the WORK VILLA series.

  • Retail Properties Business Unit

    Sadaomi Ueno

    Since joining the company in 2001, Ueno has been involved in the domestic real estate business. From 2005, he was responsible for the development and operation of shopping malls and retail buildings in the Retail Properties Business Unit. Since 2015, he has overseen office building development and management, including KANDA SQUARE, in the Office Building Business Unit. He assumed his current role in 2023.

Height Restrictions Relaxed Through Public and Private Sector Collaboration: Two New Landmarks in Kanda

Could you first tell us about the development of Terrace Square, which opened in 2015?

Terrace Square is a 17-story building complex with two basement levels.
The former headquarters of Hakuhodo, completed in 1930 and restored by architect Shinichiro Okada, is incorporated into Terrace Square.

HiramatsuFor many years, the area around Terrace Square had seen redevelopment plans come and go unsuccessfully. Initially, we aimed for a large-scale development combining four city blocks, but there were too many landowners involved, and we never made any progress. We became the lead company, narrowed down the scope to two city blocks with fewer landowners, and relaunched the project as a joint redevelopment effort with five companies, including Hakuhodo, which originally had its headquarters there, improving feasibility.

Now that the Terrace Square development has restarted, what challenges have you faced in advancing this project?

HiramatsuOne of the major challenges was the need to abolish a public road that ran through the center of the planned site. While there was a precedent for road abolition in statutory redevelopment projects in Chiyoda Ward, there was no precedent for it in private sector projects. Initially, our plan was to build an office building on the larger block and residential units on the smaller block. However, the head of our department gave a new directive to combine the two blocks and build a single office building with a larger floor area.

This was unprecedented for Sumitomo Corporation and was not easy. However, we focused on the idea of revitalizing Kanda Keisatsu-dori. The street has five lanes, but it's a one-way thoroughfare with narrow sidewalks, making it slightly difficult for pedestrians to navigate. The ward mayor at the time was very keen on finding ways to revitalize the area. After many rounds of discussion with Chiyoda Ward, we proposed replacing the public road with a plaza along Kanda Keisatsu-dori, creating an open space for pedestrians.

We also incorporated the restoration of the historically significant former headquarters of Hakuhodo. By logically demonstrating that abolishing the public road, integrating the site and creating a green plaza along Kanda Keisatsu-dori would benefit people living and working in the area, we were able to gain approval from the ward assembly, and the road abolition was finalized.

Did this experience also influence the development of KANDA SQUARE, which opened in 2020?

KANDA SQUARE, a 21-story building complex with one basement level, features a lawn area with tarp awnings and a wooden stage.
A stone monument in front of KANDA SQUARE commemorates the history of Kanda, dating back to the time of Denki Gakko, the predecessor of Tokyo Denki University.

UenoYes, our continued collaboration with local authorities played a significant role. The acquisition of the site for KANDA SQUARE began with the relocation of Tokyo Denki University, which had been in Kanda for over 100 years. Sumitomo Corporation supported the university's search for a new location, among other directives. Additionally, the Kanda Police Station needed to be relocated. The ward was able to secure the site of the former public health center as a temporary location, which helped speed up the development process. By proceeding with the development and relocation in tandem, we were also able to avoid the full impact of the COVID-19 pandemic.

Further, there was a height restriction of 100 meters in the area. As with Terrace Square, we proposed ideas such as creating a public plaza to bring people together and enhance the building's sense of connectivity. This created more space for the building's "footprint," and led to the height restriction being relaxed to 130 meters.

The area around KANDA SQUARE is enriched with a variety of tree species.

More Than Just a Building – Nurturing Kanda's History and Culture by Housing a Portable Shinto Shrine on Site

Was building relationships with the local community also an important part of the development process?

KANDA SQUARE includes a storage space for portable shrines, items cherished by the local community.

HiramatsuYes, absolutely. One of the most important factors for ward assembly members is the voice of the local community. The opinions of neighborhood associations are particularly influential. We regularly attended neighborhood association meetings, sometimes sharing drinks, and communicated our vision for the development.

This steady, sincere effort to build relationships helped us gain support for unprecedented initiatives, such as the abolition of the public road and the relaxation of height restrictions. The local community showed support to Sumitomo Corporation, for which we were very thankful.

UenoThe local community values the culture and traditions in Kanda. For example, during the development of KANDA SQUARE, we needed to relocate the neighborhood association office that was originally on the site. Instead of simply asking them to relocate, we proposed adding a storage space for their mikoshi (portable shrine) in the new office building next to KANDA SQUARE. Kanda Matsuri is a deeply meaningful and special event for the local community, but some neighborhood associations don’t have a place to store their portable shrines. In these cases, they don't have any other choice but to leave them at Kanda Myojin Shrine. Proposing a location to house their portable shrine at their own association office went over very well, and they were very appreciative.

HiramatsuWe also created a mikoshi storage space on the first floor of Terrace Square. During the festival, the plaza serves as a lively gathering place for many portable shrines.

UenoAnother key point was creating a space that would attract people on weekends. The ward had asked for a location that could help create a more vibrant community. So, we decided to include a hall in KANDA SQUARE, which now hosts live performances and events, drawing many visitors.

Boosting Kanda's Appeal: Visible Potential for Both Living and Working

In addition to the success of individual buildings, you've emphasized the importance of community. Were there other efforts in this regard?

The first floor of KANDA SQUARE is home to a Summit supermarket.

UenoOne key decision was to attract a Summit supermarket to the first floor of KANDA SQUARE. Until then, there hadn't been a supermarket in the area following the closure of the only previous one, making shopping inconvenient. We realized the high demand for convenient supermarkets when working on previous residential developments.

After extensive discussions within the team, we decided to bring Summit to the project. The decision was a huge success, as both the local residents and office workers have been very happy with the convenience it provides.

HiramatsuThe decision to attract the supermarket was a turning point in the project. Originally, there had been other ideas, but after thoroughly discussing the issue, Ueno and the team decided that what the community really needed was a supermarket. It turned out to be the right decision.

With the realization of these two projects, what kind of changes have occurred in the Kanda area?

HiramatsuThe area previously had many small- to medium-sized buildings, and large corporations rarely established offices here. However, through these two large-scale developments, Terrace Square and KANDA SQUARE, I believe we have made the potential of Kanda more visible.

Leasing space at Terrace Square was quite a struggle. It was a tough time in the market following the global financial crisis, and at the time of completion only 200 tsubo (approx. 660 square meters) out of 10,000 tsubo (approx. 33,000 square meters) were tenanted. At the time, I was both the project leader for the building's construction and the team leader for leasing, but I was appointed to focus exclusively on leasing. I really had a fire lit under me, but within 3 to 4 months, we had secured 60–70% of the leases, and within a year of completion, the building was fully occupied. This was the moment when the seeds we had carefully planted – by consistently communicating the value of Terrace Square to potential tenants – finally came to fruition.

UenoKANDA SQUARE was on a different timetable and didn't face the same challenges. Leasing was mostly smooth sailing, even during the pandemic. I feel that the success of Terrace Square helped Kanda gain recognition as a great place to work. In fact, KANDA SQUARE has now received inquiries from blue-chip companies that previously wouldn't have considered the area. Kanda, which used to be chosen mainly for its low rent, is now being compared with properties in Minato and Shibuya wards.

HiramatsuKanda has great transportation access, and the area is full of bookstores and restaurants, making it an enjoyable place to walk around and explore. By successfully completing Terrace Square, we raised the potential of the Kanda Nishikicho office area. Riding that momentum, we were able to develop KANDA SQUARE. I think we've successfully added value to the entire Kanda area.

What vision do you have for the future?

KANDA SQUARE GATE, completed in 2021, incorporates balconies filled with plant life on every floor.

HiramatsuWe are actively progressing with the development of medium-sized office buildings. One of the key concepts we're focusing on is "vertical forests." We have already incorporated this into the completed KANDA SQUARE GATE, where each floor has a balcony with thriving plant life. This creates lush, verdant spaces that can be enjoyed both by people inside the office and pedestrians walking by. We are planning several more similar buildings.

Moving forward, we aspire to continue collaborating with renowned design teams, engage in lively, meaningful discussions and propose ideas that help us stay one step ahead of other developers! In the end, we hope this will lead to benefits for all the communities we are active in, and naturally, that Sumitomo Corporation will also benefit in the process. That would be ideal.

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