Bridging Global and Local: The Growing Influence of RICS Qualifications in Japan’s Real Estate

Value of RICS Qualification

RICS is a well-established and reputable qualification among international market participants in Japan. For Japanese professionals like Mizutani, having an RICS qualification enhances credibility when working with international clients. Many real estate funds owning Japanese properties require valuations at acquisition and throughout the fund's holding period. RICS qualification is highly valued in these instances, as it signifies an international level of market awareness and practice.

This qualification brings unique skills to the Japanese market that go beyond local practices. It provides a broader scope, including areas like machinery and equipment (M&E) and business valuations, which are not covered under Japanese valuation credentials. Furthermore, RICS provides Japanese professionals with a global network and best practices, fostering an international reputation in real estate valuation.

Comparison with Local Qualifications

In Japan, the primary credential for property valuation is the Licensed Real Estate Appraiser, authorised by the government. This qualification is considered reputable and is mandatory for conducting valuations in Japan. While both the RICS qualification and the Japanese Licensed Real Estate Appraiser credential are seen as equally credible in terms of training and expertise, the RICS qualification offers a wider range of valuation services, including business valuations.

The local credential is specific to real estate, reflecting the government's regulation of the industry. In contrast, RICS offers a global perspective and consistent valuation practices that extend beyond local regulations, making it particularly valuable for professionals who work with international clients.

Market Trends and Challenges

The Japanese real estate market faces challenges in integrating environmental, social, and governance (ESG) considerations into property values. In this context, the RICS qualification is especially relevant as it provides valuers in Japan with insights into global trends. With countries like the UK and others in Continental Europe leading ESG initiatives, Japanese professionals seek to learn from their experience and incorporate similar practices in their valuations.

Professional Development and Support

Though the qualification is not mandatory for conducting valuations in Japan, RICS provides significant career development opportunities for valuers involved in international work. This experience is invaluable for career growth and the enhancement of professional expertise.

Regulatory and Compliance Issues

Although the RICS qualification is not required for regulatory compliance in Japan, it is a recognised global credential. It offers additional support during negotiations with international clients and can lend credibility in challenging situations. The RICS qualification thus serves as an important bridge, offering consistency and professionalism in international transactions.

Impact on Clients and Stakeholders

Clients in Japan perceive the RICS qualification as an international mark of expertise in the valuation field. The additional credibility it brings has a notable impact on valuation outcomes, particularly in transactions involving both Japanese and international parties. As Mizutani points out, "having the RICS qualification it adds assurance to both parties of transactions."

Future Outlook

The demand for globally consistent approaches in addressing complex issues like ESG is expected to grow. RICS-qualified professionals are poised to play an increasingly important role in Japan's valuation industry. The RICS qualification, being global, supplements the local Japanese credentials, providing a comprehensive valuation approach to both domestic and international market participants.

As Asian countries become more active in international real estate markets, RICS serves as a bridge between Japanese valuers and their counterparts across Asia. With the region's economy continuing to grow, interest in the RICS qualification is likely to increase.

Pursuing an RICS qualification in Japan offers extensive benefits, including enhanced expertise, an international reputation, and valuable global networking opportunities. Shigeko Mizutani's career is a testament to how this qualification can be a vital asset in advancing one's role within the valuation profession. RICS continues to create relevance and connectivity in the region by fostering partnerships between its members and staff. This case exemplifies how RICS supports professionals across diverse markets, ensuring they remain at the forefront of the industry. In a world where real estate challenges grow more intricate, RICS's focus on collaboration and global standards subtly yet powerfully shapes the future of valuation.

RICS in Japan

The Japan market is the third largest economy in the world and is known to be one of the most developed markets in Asia. Its capital markets are deep and broadly available to foreign investors. RICS currently have over 150 members in Japan supported by the RICS Asia Pacific team and the RICS Asia Pacific World Regional Board of which Shigeko Mizutani MRICS is the Japan representative.

The Japan Member Engagement Group (MEG) consists of members from the local market who meet monthly with the aim of bringing RICS members and industry professionals together through CPD talks, site visits and networking events and growing RICS’s presence within Japan.

RICS is currently establishing direct entry agreements in Japan with the relevant local professional bodies. The timeline for JAREA and BSIJ direct entry completion is 2024 and the timeline for ARES, JAREC and CMAJ direct entry completion is 2025.