JAPAN-BASED Sumitomo Forestry Co Ltd will invest in developing residential projects in Asean as it sees strong demand in this region.
It is launching its first project in Thailand as a joint venture with Thailand’s listed company Grande Asset Hotels and Property Plc, and Property Perfect Plc.
The joint venture will develop condominium worth Bt6 billion at Thong Lor this year, the company’s president Akira Ichikawa said.
“Thailand has the location to be at the centre of Asean. We are expanding our investment in Asean by kicking off our first project in Thailand. Then we will expand our investment in other countries in Asean to develop residential projects,” Ichikawa said after a ceremony on the setting up of the joint venture firm between its subsidiary Sumitomo Forestry (Singapore) Ltd with Grande Asset Hotels and Property Plc and Property Perfect Plc at the Royal Thai Embassy in Tokyo yesterday.
He added that the company had invested in a packaging manufacturing plant in Thailand two years ago. The company sees opportunities to invest in the residential property market in Thailand, as the Thai government is developing the country’s infrastructure. He said the demand for residences in Thailand from both locals and foreigners has shown strong growth.
Construction of Hyde Heritage @ Thong Lor will start in 2018 and is expected to be completed in 2020.
Sumitomo Forestry (Singapore) holds 45 per cent stake in the joint venture firm, Grand Star Co Ltd, which has a registered capital of Bt300 million. Grande Asset Hotels and Property Plc hold 40 per cent and 11 per cent is held by Property Perfect Plc.
“We are interested in developing both condominium, single detached houses, and townhouses in Thailand –in Bangkok and the provinces. But we cannot say now how much the investment budget is for all of our projects in Thailand,” he said.
He added that the company is also interested in developing residential projects in other countries in Asean such as Indonesia and Myanmar. Currently the company has a wood manufacturing plant in Indonesia.
Sumitomo Forestry Co Ltd was founded in 1691, when the Sumitomo family started providing timber to the Besshi Copper Mine, located in the Ehime Prefecture of west Japan. The company is today a major corporate entity operating a range of businesses in Japan and overseas, covering housing, timber and building materials, forestry and environment, and lifestyle services.
The company has so far built approximately 280,000 detached houses in Japan, for overseas businesses. The company is currently selling more than 7,000 houses a year in America and Australia. In Asia, their network is being expanded to include condominium development projects in Vietnam and Hong Kong. The company reported revenue of 1.11 trillion yen in fiscal year 2017 ending in March.
Property Perfect Plc chief executive officer Chainid Adhayanaskul said the company expects to develop residential projects under the joint venture firm with Sumitomo Forestry Group worth over than Bt30 billion from this year until 2021, both condominiums, single detached houses and townhouses.
The next project under the joint venture firm may be a single detached-house project worth over Bt5 billion. This is in the negotiations process, Chainid said.
“We need not only the investment from our Japanese partner but we also need to learn about construction technology from Sumitomo which has long experience in developing residential projects both in Japan and overseas,” he said.
Meanwhile, the company also plans to launch 25 new residential projects worth Bt31.41 billion in 2018, excluding the residential projects it will develop under the joint venture with its Japanese partner. This is aimed at driving total revenue growth of 24 per cent in 2018 compare with the year 2017, he said.