Eco-friendly real estate that serves its workers — Embracing the challenge of hybrid timber construction

The Kyobashi Intersection, where Chuo-dori Street and Kajibashi-dori Street meet, lies just a short distance from Tokyo Station. Here, in July 2025, the DAI-ICHI LIFE KYOBASHI KINO TERRACE, an office building featuring a hybrid timber structure, was born. Using the latest technology and built around the concept of Well-being meets Sustainability, this office building stands twelve floors above ground with two below, and features a wooden hybrid structure that was the tallest of its kind in Japan at the time of completion. We spoke with two individuals responsible for real estate planning and development about their dedication to KINO TERRACE, as well as their visions for the future.

Well-being meets Sustainability. Underlying this concept displayed at KINO TERRACE lies Daiichi Life’s enduring commitment to its customers.

“The life insurance business is about making promises to customers for their future 50 or 100 years down the line. As part of this approach, Daiichi Life’s Real Estate Investment Department has managed the premiums entrusted to us through real estate investments. We have continuously focused our efforts and challenged ourselves to ensure that these properties are more than just buildings. At our second headquarters building, completed in 1921, we welcomed commercial facilities on the lower floors and restaurants on the upper floors as tenants, which was a pioneering approach at the time. This created new value for the office building, generating vibrancy and facilitating human interaction. I believe this reflects our philosophy of striving to be a company that supports people’s lives beyond our core insurance business, thereby expanding the future of our customers,” says Ichiro Tsuboi of the Real Estate Investment Dept, Real Estate Investment Planning Div.

The key factor driving significant progress in this project was incorporating sustainability criteria into Daiichi Life’s investment standards. “To support our customers throughout their lives, protecting the global environment is also crucial. President Sumino often reiterates that if society isn’t sustainable, our services themselves will become pie in the sky, and that sustainability is the fundamental premise of our business. In our Real Estate Department, we took on this challenge in 2021 by pioneering a new concept called the ‘Sustainability Premium’ within the industry. This initiative aims to incorporate environmental and social considerations into our property valuation criteria,” Tsuboi explains.

As society increasingly prioritizes sustainability, various domestic and international organizations within the real estate industry have developed and implemented systems to objectively evaluate and certify properties based on environmental performance, comfort, and health. “We conducted extensive research with academic institutions on domestic and overseas cases of properties that have obtained third-party certifications from external specialized agencies demonstrating sustainability. What we found was that these properties exhibit relative advantages in profitability and price valuation compared to other properties. Based on these findings, we standardized the incorporation of investment criteria, or hurdle rates, used in investment and development decisions. This made it easier to invest in sustainability-focused properties, and we became a leading example of promoting investment and creating a positive impact across the entire industry,” Tsuboi says.

Around that time, the predecessor building that stood on the KINO TERRACE site had reached approximately 60 years of age, prompting consideration for its replacement. Consequently, this project was launched as the first case study to adopt the concept of a sustainability premium.

The approach chosen was a “hybrid structure combining wood and steel.” Mio Arai, who led this project in the Real Estate Investment Dept, Real Estate Developing Div, explains the reasoning behind it.

“Our mission was to maximize the values of environmental sustainability, building functionality, and enhanced well-being. First, environmentally, we achieved approximately 740 tons of CO2 sequestration by using about 1,100 cubic meters of domestic timber. This corresponds to one of the largest volumes used for an office building in Japan. Wood stores carbon absorbed by forests, and the establishment of a cycle of ‘harvesting, using, planting, and nurturing’ forests contributes to carbon neutrality and related goals.*1 The active use of wood in KINO TERRACE contributes to both CO2 sequestration and the circular utilization of forest resources.”

“The adoption of this hybrid timber structure, CO2 sequestration through timber use, and the effective use of recycled resources in approximately 70 percent of the steel materials used—specifically electric arc furnace steel—achieved a CO2 reduction of approximately 37.5 percent during construction compared to steel buildings of similar scale. While we have consistently implemented energy-saving measures for CO2 reduction during post-completion operations, we consider the expansion of these efforts to the construction phase itself to be a significant achievement.”

“On the other hand, we made a conscious effort to preserve functionality as a rental office space while incorporating extensive wood use. For instance, by strategically employing steel and timber where appropriate, we achieved a 40-meter by 17-meter column-free timber space on the standard floors, ensuring flexibility in office layouts. Balancing environmental sustainability with the functionality required for office spaces is crucial from a real estate investment perspective,” Arai says.

Using wood also contributes to enhancing the well-being of facility users. “It has been confirmed that spending time in wooden spaces improves concentration, facilitates the generation of ideas, and provides mental relaxation through the scent of wood.*1 To leverage these effects, we actively utilize wood not only in structural components but also in interior design.”

Beyond the comfort of wood, various other features of the building enhance well-being. “The windows offer expansive views. The lush greenery around the TOKYO SQUARE GARDEN complex—partially owned by Daiichi Life—catches the eye, allowing you to feel nature’s presence even in the heart of Tokyo. Terrace spaces on each floor are designed to serve as areas for refreshing breaks during work hours and as places for communication.”

Delivering the value of a new era to tenant companies, visitors, and the people of the city

The Well-being meets Sustainability concept also proved key in attracting tenants. “Some tenants decided to move in because, beyond office functionality, they valued an office that contributes to their employees’ well-being. The environmental credentials of KINO TERRACE for company tenants resonated with them. We feel that sustainability-focused real estate is attracting particularly significant attention.” Arai expressed hope that KINO TERRACE could serve as a catalyst, raising awareness of sustainability across society as a whole.

“This building, with its abundant use of wood in the entrance and ceilings, will surely provide a soothing and relaxing space for visitors and passersby alike. We hope that the presence of KINO TERRACE will be a step toward making the town a warmer and more fulfilling place.”

What kind of tomorrow will the KINO TERRACE project lead to? We asked Tsuboi about his vision for the future.

“We consider wood utilization an important option from a real estate investment perspective, but we are constantly challenging ourselves to achieve environmental and social sustainability through varied approaches. For example, as part of our environmental initiatives, we aim not only to construct new buildings but also to extend the lifespan and longevity of existing structures. Our Hibiya headquarters building, constructed in 1938, has undergone two major renovations and continues to be cherished and utilized today. Regarding social engagement, we are also focusing on creating communities around our buildings. KINO TERRACE, for example, is an ‘open building’ that aims to enhance not only the well-being of office workers but also the comfort of visitors and passersby. At SETAGAYA Qs-GARDEN, which opened in 2022, we are developing a community where residents representing different generations*2 can continue to live in peace while interacting through health and sports events. Similarly, D-LIFEPLACE SAPPORO, completed in 2023, is an office building directly connected to the ‘Chi-Ka-Ho’ underground pedestrian walkway beneath the Sapporo subway station. It hosts various events like markets and workshops in the open space connecting the underground walkway to Sapporo Ekimae-dori Street above ground, creating a place for local people to connect. Moving forward, we will continue to explore diverse possibilities without limiting our approach, striving to create a society that is gentle to the environment, its workers, and the city itself.”

*1 From Guidance on the Evaluation of Timber Utilization in Buildings, Forestry Agency of Japan
*2 On its nine-hectare site, Daiichi Life is developing sports facilities, family-oriented condominiums, a medical mall, student housing, assisted living facilities for seniors, and community facilities in collaboration with various partners.

※hero image: Rooftop garden of KINO TERRACE, featuring a wooden deck and trees, allows visitors to feel the changing seasons