JV with AP Thailand part of Mitsubishi Estate's plan
August 20, 2014 01:00
By Somluck Srimalee
Japanese real-estate giant Mitsubishi Estate Group is budgeting US$1.8 billion (Bt57 billion) for investments in Europe, the United States and Asia until 2016.
In Asia, the group now has investments in China, Singapore, Vietnam and Thailand. It is negotiating with partners to take the next step to Malaysia and Indonesia, managing director of Mitsubishi Estate Asia Pte Ltd, a subsidiary of Mitsubishi Estate Group, Shojiro Kojima said in a group interview yesterday.
Mitsubishi Estate on Monday signed a joint-venture agreement with AP (Thailand) to develop their fourth condominium, the Aspire Sathorn-Thapra, worth Bt3.3 billion. This follows their success in developing three condo projects worth Bt7.2 billion last December.
“We expanded to Europe and the US more than 40 years ago. But in Asia we started in 2008 in Singapore, 2010 in Vietnam, 2011 in China and 2013 in Thailand when we saw growth in Asian countries in all property segments including residential, office and retail,” he said.
Katsuaki Mori, a senior executive in the international business division of Mitsubishi Jisho Residence Co, said the company had confidence in the Thai property market’s strong growth especially in Bangkok, where urbanisation is following the mass transit system – both the BTS Skytrain and the MRT.
Thai lifestyles have also changed towards small families that need to stay in condominiums like Tokyo people, and people’s incomes are also rising enough to buy homes in the city, so the group has invested in residential projects in Thailand.
Mitsubishi Estate is investing Bt4 billion in four condo projects in Thailand valued at Bt10.5 billion with AP.
“We decided to invest in Thailand during the country’s political uncertainty in December because we were confident that the health of the property market in Thailand [would not suffer] any impact from the country’s political problem,” Mori said.
Other countries in Asean also have potential for the group’s expansion in the residential, retail and office market. This would depend on demand in those markets, he said.
Anuphong Assavabhokhinm chief executive officer of AP, said half of the units in the first three JV condo projects had been sold, thanks to robust demand for condos even though the economy contracted in the first quarter of this year and expanded only slowly in the second quarter.
“A joint venture does not only support money for expansion but is also a way to improve our business structure by learning from our Japanese partner, and that can improve our construction process, architecture, design and business management. This is a challenge for our business’ sustainable growth in the long term,” he said.
During the remainder of the year the company will roll out seven projects worth Bt8.63 billion, including the Aspire Sathorn-Thapra, which are part of 17 projects worth Bt23.1 billion launched this whole year. This will boost revenue to Bt21 billion and presales to Bt21 billion this year.
“We target growth of 15-20 per cent a year,” Anuphong said.