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Thai developers hook up with JAPANESE PEERS

Jan 20. 2019
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By SOMLUCK SRIMALEE
THE NATION

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LISTED AND non-listed property firms in Thailand have entered into joint ventures with their Japanese peers since 2013, developing residential projects worth more than Bt266.23 billion to date, and allowing Japanese firms to invest in Asean countries through Thailand as the gateway.

According to a recent survey by The Nation, 10 listed and non-listed property firms had set up joint ventures with Japanese property firms to develop residential projects in Bangkok. The latest joint venture has SC Asset Corporation Plc shaking hands with Nitshitetsu Group from Japan, to create SCNNR1 Co Ltd with a registered capital of Bt1.2 billion. They are planning their first condominium project, The Crest at Lat Phrao district.

“We decided to team up with the Japanese firm to improve our residential project design and construction process to the Japanese standard,” SC Asset Corporation Plc’s chief executive, Nattapong Kunakornwong, said recently. 

The Nation survey found Ananda Development Plc the first Thai property firm to have entered into a joint venture with a Japanese developer, Mitsui Fudosan, in 2013. Since then, they have developed 26 residential projects together with a total project value of Bt120 billion. Most have achieved success with sales averaging 60 per cent and more, and one development, ideo Q Chula-Samyan, has already sold out and will this year transfer units to its customers.

The second co-venture unites AP (Thailand) Plc and Mitsubishi Estate Group, which have since 2014 built 14 condominium projects worth Bt65.42 billion (for other co-ventures, see graphic).

“We learned how to design space and improve the construction process from our Japanese partner, boosting our know-how in creating differentiated products to serve our customers’ demand,” AP (Thailand) Plc’s chief executive, Anuphong Asavabhokhin, said recently.

Meanwhile, Japanese firms who have expanded their investment to Thailand see it as an opportunity to expand to Asean countries. However, they are particularily interested in Thailand, which is aggressively investing in the development of its infrastructure, including the rail system.

Tomoyasu Yamabe, managing director at Shinwa Real Estate (Thailand) Co Ltd, a joint venture firm between Japan-based Shinwa Group and its Thai partner, said the company began expanding to Thailand three years ago.

A joint venture with Woraluk Property Co Ltd in 2017 led to their first condominium project, Runesu Thonglor 5, worth Bt1.2 billion. All units in the project will be transferred to buyers this year.

Yamabe, who is also a director of Shinwa Group, says the company is now planning to sell its construction technology in the Philippines, Vietnam, Malaysia, Indonesia, Taiwan, Hong Kong and Singapore.

“We see strong demand for residential unit in the region. Asean countries are expanding their investments in infrastructure projects, especially the rail systems, which will change people's lifestyles as they move to locations close to mass transit routes.

“This creates a new market and opportunity to expand our investment in this region, where we plan to develop residential projects located close to the rail systems,” he said.

“Although Thailand will hold a national election this year, it will not impact on our business expansion in the local market. We still see strong demand and the potential to expand our business in this country,” he said.

Japan-based Tokyu Corporation’s director and senior managing executive officer, Toshiyuki Hoshino, says the group’s joint venture with Sansiri Plc will see spending of as much as US$100 million yearly between 2018 and 2020.

The firms shook hands last year, enabling expansion through Thailand and on to Asean neighbours with a focus on the residential property sector. Half of the three-year budget will be invested in Thailand with the rest in Vietnam, said Hoshino adding that the company’s focus would later expand to other countries in the region.

“We will expand our investment in Asean, especially Thailand, when we see business opportunity as countries expand their investment in infrastructure development, especially rail systems. A mass-transit network creates strong demand for residential units along the routes,” Hoshino affirmed.

Thailand is clearly seen by the Japanese investors as the gateway for entry into the Asean property market. Japan-based Sumitomo Forestry Co Ltd’s president, Akira Ichikawa, said Thailand's central location in the region encouraged his company to kick off its first regional project in the kingdom.

It set up a joint venture firm with Grande Asset Hotels and Property Plc and Property Perfect Plc last year. The company will later expand its investment to other Asean countries, focusing on developing residential projects, Akira said.

The company invested in a packaging manufacturing plant in Thailand two years ago, and was attracted to the residential property market by the Thai government’s programme for infrastructure development.

Demand for residences in Thailand remain strong among both locals and foreigners, he said.

 

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