Kyushu Railway Co is entering the market for condominiums in Bangkok in response to steady demand from middle-income earners in the suburbs.
The Japanese railway operator, known as JR Kyushu, said in a statement it will set up a local firm with other developers later this month for its first overseas condo development project.
JR Kyushu, which serves southwestern Japan, is teaming up with Hoosiers Asia Pacific Pte Ltd, a Singapore unit set up last year by Tokyo-based Hoosiers Holdings, and All Inspire Development Plc, a Thai developer established in 2013.
It stopped short of disclosing details such as total investment and investment ratios, with a spokesman saying they are still under negotiation with the partners.
Last year, JR Kyushu acquired a serviced apartment complex in Bangkok as its first real estate business in Thailand, the second-largest economy in Southeast Asia.
The railroad operator said the condo development project will help it build expertise to expand its real estate business in Thailand and other countries in Southeast Asia as the company is pursuing new businesses and expanding outside the Kyushu area as one of three strategies in the group's medium-term business plan for 2016-2018.
It aims to earn more than 62% of its group operating revenue from non-rail business, including real estate development and restaurants, in the 2018 business year, up from 60.3% three years earlier.
"In the latest project, we are targeting middle-income earners in Bangkok who are looking for affordable condominiums in the suburbs," a Hoosiers Holdings press officer told NNA, adding that All Inspire will hold at least a 51% stake in the new venture.
Hoosiers Asia Pacific and All Inspire started a project last year to construct four eight-storey condominium buildings with a total of 774 units in Bangkok's eastern suburbs.
Analysts are expecting Japanese companies to invest more in growing Asian economies as the working population in Japan shrinks.
Akiko Nanasawa, manager at the Center for Strategy of Emergence at the Japan Research Institute, told NNA that land prices in central Bangkok are rising sharply and there are signs of a slight oversupply of condos.
"But along the rail lines extending to the north and east, there is growing demand for housing from Thai middle-income earners," she said.
NLI Research Institute economist Makoto Saito said "Thai economic performance is stable, backed by the well-developed manufacturing and non-manufacturing sectors, as well as innovation drives. Kyodo