BANGKOK, NNA - Japanese real estate developers are steadily advancing into the Thai market, normally partnering with local firms to cash in on demand for high-end residential units.
Mitsui Fudosan Co. on Wednesday announced the launch of five high-rise condominium projects totaling 21.7 billion baht ($638 million) on prime Bangkok land in partnership with Ananda Development PLC.
Mitsui Fudosan, a major Japanese real estate developer, has partnered with Ananda, a local real estate and property developer that focuses on the Thai capital and the metropolitan region, since 2013 and has already engaged in 18 joint venture projects worth 81 billion baht.
The two partners are expected to unveil four more joint venture projects before the end of this year.
Hankyu Realty Co., the property arm of Japanese conglomerate Hankyu Hanshin Holdings Inc., also recently announced plans to develop two condominiums worth 7 billion baht along Bangkok's Mass Transit System stations in collaboration with Sena Development PCL.
The two "Niche Mono" brand condos target middle- to high-level senior residents.
Hankyu Realty President Ryuichi Morotomi says his Osaka-based company is expanding its operations abroad and finds the Thai market an attractive opportunity because of the expansion of the rapid transit railway system. Hankyu Realty made its initial overseas foray into Vietnam in 2015.
Pornpak Boonthong, deputy managing director of Agency for Real Estate Affairs Co., a Thai property consulting firm, told NNA that many Japanese real estate developers operate joint venture companies, holding a 49 percent stake in Thai developers. The partnerships mainly invest in high-end condos.
She said Thai partners are benefiting from joint ventures with Japanese companies, including strengthening financial structures to afford land in promising locations. Taking advantage of Japanese innovation in space optimization and senior and retirement property development is also a benefit.
According to Pornpak, Thailand has huge potential for property investment thanks to a relatively inexpensive average unit price of 3.7 million baht, as compared with much more expensive property prices in Singapore and Hong Kong. The Thai market is expected to grow 5 percent this year with an annual demand of 80,000 to 100,000 units. (NNA/Kyodo)