As I prepare to fly to Davos for the annual meeting of the World Economic Forum, I’m reflecting on what a privilege it is to have the opportunity to meet global leaders and engage in discussions that will contribute to shaping our future.
The World Economic Forum received great attention two years ago in Japan when Prime Minister Abe unveiled to the world his economic reform policies dubbed “Abenomics”. Having just won the bid for the 2020 Summer Olympics and Paralympics games, and with Japan showing signs of economic recovery, the country was squarely in the spotlight. PM Abe’s speech at the Forum “A New Vision from a New Japan” rejuvenated excitement in Japan, which had been stagnant for many years.
Many policies PM Abe outlined in that speech have made progress over the past two years including Japan’s entry into the Trans-Pacific Partnership (TPP), diversification of its Government Pension Investment Fund’s $1.2 trillion assets, reform of the corporate tax structure, participation of more women and foreigners in the labor force, and implementation of the new corporate governance code. All these measures will affect the economy, and will directly or indirectly have repercussions for JLL’s business in Japan.
In particular, I believe the new corporate governance code is a catalyst for Japanese companies to strengthen their global competiveness. Its main purpose is to increase returns for shareholders, an important topic for Japanese corporates. The implementation of this new code helped drive Japanese stocks to their highest level in almost 20 years.
As highlighted in our recent Japan Corporate Real Estate Survey, Japanese companies lag their global counterparts in leveraging real estate strategically to optimize their business. Many Japanese corporates have in-house real estate functions that are decentralized, making it difficult to drive further value from their real estate. As outsourcing still remains an uncommon business practice in Japan, it will not be an easy task to change their traditional corporate structure, but I am optimistic that with new reforms like these, JLL can help to optimize and advise on Japanese corporates’ real estate portfolios.
At Davos, I’m looking forward to meeting with Japanese senior executives to exchange these ideas and discuss topics that will impact our business in Japan.