On The Ground in Japan: What am I seeing in the relocation industry?

Here is what I am seeing from the viewpoint of a relocation company active in Tokyo, Nagoya and Osaka. After the quake, temporarily many people left. Many overseas, many to Osaka. After GW, most came back; we even had people leaving from Nagoya, but most came back. Looking at international schools as one good indicator, you will see that 90% or more are now back; some nationalities being a little more conservative than others. The German school in Tokyo, for example, didn't open back up for sometime after the quake. But overall, you are seeing 90- 95% of people back.

Now here we are in June. June / July / August is the busiest relocation season. There are always lots of people leaving Japan during this period. Don't forget this! Even without the quake, in any year there is significant movement during this time; some years more than others, and sometimes more inbound than outbound, and vice-versa. The net trend is that outbound is up. Talk to moving companies and they will tell you it is a record year. Yes, there are more people leaving this year than normal. Many are leaving a little earlier than they would have. However, amongst this we are also seeing people coming to Tokyo also. Real estate is moving. If you don't put an application on popular properties immediately, someone else gets the property and you miss out. There is inbound activity, so it is not all outbound!

Now, we are seeing resistance from families. This is too be understood considering the nuclear issues. Some are leaving their families at home or somwhere else for the interim. Some companies are choosing to send more single and married employees without children, or more senior members.

With regard to Osaka and companies moving their headquarters, there maybe one or two companies that have moved their plans forward quickly. However, on the ground there is no evidence or sign of a huge influx of companies into Osaka, nor Nagoya. Companies are certainly talking more about contigency plans and spreading the risk, and there are definately companies seeking information on the options, but any rumor that hordes of companies are deciding to get out of Tokyo and set up in Osaka is completely unfounded right now.

It is my view that over the next 12- 24 months some companies will choose to spread their risk and move operations around a little. However,
1. As time goes by the focus on spreading the risk will shift to the next "crisis" or the next "priority" and a high percentage of talks will stop just there AND
2. The economy in Japan is not in good shape, and therefore when many of these companies do the cost analysis and see the size of the bill to move their operations (moving offices is the easy part..... moving employees away from where their families and homes are is more difficult) many talks will stop right there too. This is off course assuming that as time goes by that the reactor issues are slowly brought under control. I would be interested in hearing of others predictions.....

The H&R Group is MORE THAN RELOCATION!

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