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Development & Financing

Investment and Development: Concentrating Shimizu's Expertise in Real-Estate Activities

Across areas ranging from project conception through development, financing, and operations following construction, Shimizu works to develop new business models that combine the latest financing techniques such as securitization, project financing, and special purpose vehicles (SPVs). All these tools are based on years of experience and expertise, not just in design and construction but in real-estate development as well. In this role as an asset partner, we strive to maximize asset value alongside our customers.

Case Study: Creating New Business through Securitization

Construction began in March 2004 on the Hotel Universal Port on a site bordering Osaka's Universal Studios Japan. The project developer was a joint venture of Shimizu, City Trust and Banking Corporation, and The Sumitomo Trust & Banking Co., Ltd. A special purpose company (SPC) had been established as the main company responsible for project development. The SPC applied a development securitization method based on sales of trust beneficiary rights to fund the purchase of the land and hotel construction. Shimizu designed and constructed the 600-room hotel, while the Investment and Development Division managed and operated the overall project as an agent of the SPC. This project provided investors an attractive business with a highly profitable structure.

Hotel Universal Port

PFI: Applying Shimizu's Expertise in Public-Sector Projects

A private finance initiative (PFI) project differs from traditional public-sector construction in that it involves the stable and continuous provision of services including not just facility preparation, but long-term maintenance and operations as well. Since 1999, when we took part in Japan's first model PFI project to build emergency power-generation facilities at the Tokyo Metropolitan Government Bureau of Waterworks' Kanamachi Purification Plant, we have been involved in a wide range of PFI projects including government offices, a housing complex for government employees, educational and cultural facilities, and hospital wings. Through these projects, Shimizu has accumulated a wide range of expertise, including not just traditional facilities preparation (construction) services, but inter-industry partnerships with maintenance and operation specialist firms and a wide range of creative funding tools devised by operating companies to provide optimal solutions. Drawing on a wealth of expertise gathered in past projects, Shimizu will continue to provide services benefiting society at large through a wide range of PFI projects.

Case Study: Contract Concluded for Japan's Largest PFI Project

PFI projects involving private-sector contractors are currently being deployed in Japan to develop a broad range of public infrastructure elements. In August 2006, Shimizu signed a contract with the Tokyo Metropolitan Government for the largest PFI project in Japan to date. This project will involve the construction of a public hospital complex incorporating a full pediatric medical care unit. These facilities will serve the Tama region in western greater Tokyo.

Reflecting the age of certain facilities and recent advances in medical care, the project entails moving four public hospitals to a purpose-built medical campus that will serve as a hospital providing medical services to the entire Tama region. As the lead contractor of a consortium of private firms that were awarded the contract, Shimizu received plaudits for our proposal, which addressed issues such as the operation of campus facilities used for widely different activities and for procurement, construction, and installation plans. Once the new hospital opens, we will provide a high-quality range of services on a contractual basis, including facility management, operations support and maintenance, medical administration, on-site catering and cleaning, and procurement services for drugs and diagnostic materials.

Projected completion diagram
With 1,350 beds, the hospital will have a total floor area of 126,000 m2. On completion, ownership will transfer to the Tokyo Metropolitan Government. A special purpose company (SPC) owned by Shimizu and other companies has the right to manage the complex for an initial 15-year period.

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