Central Pattana (CPN), the SET-listed retail and property developer under Central Group, has teamed up with Mitsubishi Estate, one of Japan's leading developers, to increase the competitiveness of Central Village luxury outlets in Southeast Asia.
The company on Tuesday signed a joint venture agreement worth 1 billion baht with Mitsubishi Estate through the latter's Singapore-based subsidiary Mitsubishi Estate Asia for a collaboration to operate Central Village in Thailand.
Under the agreement, CPN will hold a 70% stake in CPN Village, the operator of the Central Village luxury outlet, while Mitsubishi Estate Asia takes the remaining 30%.
Mitsubishi Estate is a top real estate developer in Japan, with revenue of US$11.4 billion in its fiscal 2019. The company has developed real estate in the US, Britain, Singapore and Thailand. It operates nine outlet malls across Japan, including in Gotemba, Rinku and Shisui.
Mitsubishi Estate entered the Thai property market in 2013 via joint ventures with SET-listed developer AP Thailand Plc on condo development in Bangkok. They have developed 17 projects with a total of 16,000 units.
A few years ago, Mitsubishi explored a joint venture to develop Grade A office buildings in inner Bangkok when the sector was robust, with strong demand and low vacancy. AP was not interested in non-residential developments, so Mitsubishi teamed up with Raimon Land earlier this year for an office tower on Phloenchit Road.
The outlet mall is the third business that Mitsubishi Estate has invested in Thailand, but it marks the group's first outlet mall in the region.
Yutaro Yotsuzuka, managing director of Mitsubishi Estate Asia, said on Tuesday that the company chose Thailand because it has promising potential in terms of investment opportunities, infrastructure and tourism.
Thailand enjoys the most progressive tourism growth in Asean. Estimated arrivals in 2020 will grow by about 4%, on a par with this year's rate. There are also positive signs indicating the return of Chinese tourists and a rise in Indian tourists, Mr Yotsuzuka said.
"Japanese investors are among the top three nationalities in Thailand," he said. "Additionally, we are the top investing nationality in the Eastern Economic Corridor, with an investment value of 100 billion baht or almost half the total investment in the corridor."