Delays and cost overruns disrupt urban redevelopment projects across Japan

Earlier in March, the Nikkei Shimbun reported that urban redevelopment plans across Japan are facing widespread delays and rising costs, with nearly 80% of ongoing projects experiencing setbacks, according to a nationwide survey by news outlet.

Data compiled by the Nikkei Shimbun who surveyed 144 projects.   Original graphic by the Nikkei Shimbun and translated & edited by Patience Realty.

On average, timelines have been extended by 2.7 years and costs have increased by 20%.

The delays are largely driven by surging material prices and chronic labor shortages. Many projects rely on public subsidies, and revisions often result in increased financial strain on both national and local governments.

Tokyo Projects Hit Hardest

Tokyo is seeing some of the most significant disruptions. At Korakuen Station, a redevelopment project originally approved in 2012 has had its completion delayed by nearly six and a half years, with total costs rising about 80% to ¥136 billion. Government subsidies for the project have also more than tripled.

At Itabashi Station’s west exit, redevelopment plans have already been revised twice. The project is now expected to finish over three years later than initially scheduled due to rising construction costs and a shortage of contractors.

Construction Costs and Labor Rules Weigh on Progress

Around 70% of affected projects cited rising material costs as a primary factor. Tokyo’s construction cost index for condominiums hit a record high in February 2025, driven by steel price hikes and new overtime restrictions introduced in April 2024.

In Hyogo Prefecture’s Sanda City, labor constraints forced an eight-month extension to the construction schedule for a redevelopment project near Sanda Station. Across the industry, worker shortages continue to push wages higher.

Developers Scale Back Plans

To contain escalating costs, some projects are downsizing. In Oita City, the number of floors planned for two residential towers has been reduced by six. In Koriyama City, Fukushima Prefecture, floor space per unit is being trimmed by nearly 10%.

Meanwhile, in Tokyo’s Nakano Ward, a planned redevelopment of the Nakano Sunplaza complex has been shelved due to spiraling construction expenses.

Quoted in the Nikkei article, Professor Hideki Koizumi of the University of Tokyo notes, “The larger the project, the more difficult it becomes to forecast - and the greater the risk of delay or suspension.”

Source:

Nikkei Shimbun (Japanese only; paywalled)