Mitsubishi targets offices

Mitsubishi targets offices

Japanese developer Mitsubishi Estate Group plans to invest in office development in Bangkok this year or next after a three-year joint venture in condo projects worth a combined 47 billion baht with SET-listed developer AP (Thailand) Plc.

Shojiro Kojima, managing director of Mitsubishi Estate Asia Pte Ltd, a subsidiary of Mitsubishi Estate Group, said the office market in Bangkok is attractive as demand is strong and vacancy rates are low.

"We are interested in new developments rather than acquisitions as we have expertise in office development in our homeland," he said yesterday after an annual board meeting with AP in Phuket.

Mitsubishi is also in talks with partners other than AP, as non-residential development is not in AP's interest at the moment.

"Offices are a global product and we have a lot of office buildings in Japan. About 60% of our revenue comes from commercial properties with offices," he added.

Other commercial properties it is interested in included retail, but Mr Kojima admitted it will not be an easy market to enter as shopping malls in the central business district are very competitive.

If Mitsubishi delves into retail, it will team up with experts or strong partners, he said.

"If we choose retail, it may be an outlet mall to avoid the strong competition," said Mr Kojima. "Logistics is another area we are studying as it is a rising global trend, driven by the e-commerce market."

Mr Kojima said Mitsubishi would continue investing in condo development with AP. Both plan to launch two joint venture projects worth a combined 14 billion baht in the first half of 2017. One of them will be on Wireless Road and the other on Phahon Yothin Road, opposite from Central Plaza Ladprao.

"We aim to develop condo projects with AP worth around 20 billion baht annually," he added.

From 2014-16, the joint venture launched eight projects with a total of 6,500 units worth a combined 27 billion baht. In total, they averaged a sales rate of 85%.

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