SET-listed developer Sansiri Plc and its Japanese partner, Tokyu Corporation, are eyeing development of a township project in Bangkok within the next few years after agreeing to their first joint venture worth 2 billion baht on Ekamai Road later this year.
Sansiri's chief operating officer Uthai Uthaisangsuk said Tokyu, a private railway firm and land developer in Japan, can help Sansiri tap customers in Japan and boost its potential to develop a large-scale project.
"We don't need funds but a new market," he said. "The first commitment we aim from the joint venture is to have Japanese customers and expand this market base. Next is a development of a township project."
Sansiri and Tokyu will look for a potential plot to develop in Bangkok.
Sansiri has a large plot of land of around 100 rai in the Ram Intra area available for development but it is only feasible for single house and townhouse developments, which are less attractive to overseas investors.
"Land plots for township developments may either be freehold or leasehold as land prices in prime Bangkok locations have risen highly, driving up the land cost to 30% of total development costs from 15%. The freehold price may be too high to develop," he said.
Mr Uthai said there is a good chance of Sansiri and Tokyu Corp bidding for large-scale plots owned by government agencies like the State Railway of Thailand to develop a mixed-use project, since Sansiri and Tokyu have other strategic partners.
Sansiri also has a strong partnership with Skytrain operator BTS Group Holdings Plc.
Both have a total of eight joint venture condominium projects worth a combined 30 billion baht.
Sansiri also partners with Samitivej Hospital to provide consulting services on designs for residential projects and will expand the service to wellness centres, medical services and senior-friendly facilities in the future.
After seven months of talks, Sansiri and Tokyu established Siri TK One Co on Monday, with registered capital of 10 million baht and where Sansiri holds a 70% stake, Tokyu 29% and Saha Tokyu Co, a Tokyu subsidiary in Thailand, 1%.
The joint venture plans to develop its first project, Taka Haus, a low-rise condominium worth 2 billion baht, which will be launched in Tokyo, Bangkok and other overseas cities next month.
It will be located on a 3.32-rai site on Ekamai Soi 12, comprising two buildings of seven and eight storeys and a total of 269 units measuring 30-71.5 square metres. Construction will start in December and is scheduled for completion in 2019.
Tokyu has two joint ventures in Thailand. One is in construction with Ch. Karnchang-Tokyu Construction Co, which developed the Purple Line.
The other is with Thailand's leading consumer conglomerate Saha Group, Saha Tokyu Corporation Ltd, which was behind the HarmoniQ Residence Sriracha, a serviced apartment in Sri Racha for Japanese expatriate families that opened in 2016.
"We are interested in large-scaled property development in Bangkok whether it be on a freehold or leasehold plot," said Toshiyuki Hoshino, director, senior managing executive officer and executive general manager of international business headquarters of Tokyu Corporation.
SIRI shares closed yesterday on the Stock Exchange of Thailand at 2.14 baht, up eight satang, in trade worth 261 million baht.