Tokyo's NTT Building Houses Super-Firms Salomon, Nomura

While many companies headquartered in downtown Tokyo are pulling up stakes and heading for the suburbs, five major trading firms are setting up shop in the new NTT Urban Net Building.

Located in the super high-rent Otemachi district, a stone's throw from the Imperial Palace gardens, the superficially smart NTT Urban Net building will house trading units from Nomura Securities Inc., Daiwa Securities Co. Ltd., Salomon Brothers Asia Ltd., Barclays de Zoete Wedd Ltd. and Sumitomo Bank and Trust Co. Ltd. Altogether, the building is expected to house between 2000 and 3000 trading positions. Nomura has taken ten floors of the building, including two double-floor trading rooms.

The big winners in terms of supplying data distribution and information systems are Nomura and Hitachi Computer Corp. and Quick Corp., co-developers of the video switch distribution system that serves most of the building's tenants. Except for a few pockets of resistance, the Hitachi-Quick combo beat out competitive bids from Reuters Asia Ltd., and Micrognosis International.

Also well-represented in the building is Digital Equipment Corp. which seems to be the unofficial favorite of Tokyo's technical fixed-income traders. Nomura will deploy about 30 DEC VAXstation 3100s on its trading floor in support of fixed-income traders and research analysts. Nomura also uses Sun SPARCstations to support its research team for asset management and equity trading, but no SPARCs have been installed in the new building to date.

Nearly all of Nomura's 1,000-plus traders will be served by a color video switching system co-developed by Nomura and Hitachi and marketed by Quick. The Nomura-Hitachi switch distributes video sources (including full-motion TV signals) via optic fiber LAN. Nomura will also be using Hitachi telephone turrets.

Reuters has salvaged orders for a total of approximately 80 positions to be served by Reuters/Rich video-switch. Barclays Bank has taken Reuters' color PRISM switch for 30 positions and Daiwa Bank's FX department will be using Reuters/Rich CIS/Triarch for 50 traders.

Micrognosis International had been engaged to supply Sumitomo Bank with a temporary digital switch at its old site. It isn't clear whether Sumitomo will be sticking with Micrognosis for its Urban Net building installation. Hitachi is rumored to be developing a digital switching system for Sumitomo but sources at Hitachi and Sumitomo decline to comment.

NTT Urban Net building features many of the high-tech trappings commonly associated with intelligent buildings: robot window-washers, executive washrooms with electric eyes and heated toilet seats and giant TV screens in the lobby. But some tenants are disappointed with more fundamental aspects of the building's infrastructure.

A source with Salomon Brothers in Tokyo complains that ceiling heights in Urban Net were definitely not specified with trading rooms or equipment rooms in mind. Especially in the equipment rooms, where cabling is at its most dense, floors must be raised to accommodate the tangle. The result is an uncomfortably low ceiling. Nomura got around this problem by dropping two of its ten floor slabs. But Salomon has fewer floors to work with.

Another deficiency of the new building is its lack of a common uninterruptible power supply (UPS). While common emergency power is provided, each tenant must allocate space and install its own UPS.

"Smart" buildings are springing up all over Tokyo and trading firms are highly sought-after tenants. All 20 of the 21-story NTT building's commercial floors are leased out. Indeed, there was a waiting list for the space, according to one of the current tenants. In a real-estate market where land prices approach $300,000 per square meter, waiting lists are hard to come by.

But Otemachi, where the NTT building sits, is the site of headquarters buildings for many of Japans leading banks and insurance companies. Despite the potential cost savings of a suburban location, "it's still very important to be close to your clients here," says one source in the new building.

The new NTT building was built on the site of an old telephone switching center. At 21 stories, it's a skyscraper by Tokyo standards. Tokyo enforces a special set of construction codes designed to improve a building's chances of survival in the event of earthquake.