In recent history, a lot of Japanese companies have had investment interests in Thailand and especially its capital, Bangkok. Even though many consider the Japanese to be closed off and focused on doing business within their country, JR Kyushu, a large railway operator from Japan, has decided to start their first-ever development project overseas.
Even though the company is essentially a railway operator, their development project is going to revolve around condos. As the demand for condominiums in Bangkok keeps growing due to the rise of middle-income families, the company found it convenient to make such an investment even though they haven’t really had similar business operations in the past.
However, the company is not going through with this project on its own, as there are several Asian companies involved. This makes the project a lot bigger and increases its chances for success.
Companies working alongside JR Kyushu
One of the things that you can also hear about Japanese businesses is that they prefer working with their own countrymen and that they will work with foreigners only on their turf. However, this brand new project by JR Kyushu shows the exact opposite, as the company will work overseas for the first time.
At the same time, they will be working on a project that has nothing to do with the work they’ve done so far while partnering up with several other Asian companies from other countries. This large cooperation includes JR Kyushu that is established in southwest Japan, Hoosiers Asia Pacific Pte Ltd, a company from Singapore which is actually a unit from Hoosiers Holdings from Tokyo, and a developer from Thailand called Inspire Development Plc.
At the moment, there haven’t been any official statements or releases that revealed the exact specifics of the project and how much will be invested by each party. The leaders of the project, JR Kyushu, say that all of the specifics are still being negotiated among all the parties involved and that they will soon be clear.
What this project is about
In 2017, JR Kyushu already showed its business interest in Bangkok when they purchased an apartment complex in the capital of Thailand. This is why these future incentives aren’t so surprising, as JR Kyushu is a big company that won’t enter such a large market in Southeast Asia without coming up with a large plan and grabbing a slightly bigger piece of the market.
The JR Kyushu Business Development affiliate company and Onyx Hospitality Group from Thailand together purchased an apartment complex called Shame Lakeview Asoke located in central Bangkok with over 400 units. JR Kyushu also purchased serviced apartments located in Sukhumvit Soi and the Onyx Hospitality Group was appointed as the hotel management service provider for that location.
There are also areas and properties that will be renewed by the end of this year, as well as in 2019. Based on these projects done earlier this year and the year before, JR Kyushu has taken giant steps towards making their business presence known in the area of Southeast Asia.
Apart from these moves, the company plans to invest in more condo development and create affordable apartments for the growing middle-class in Bangkok.
JR Kyushu plans to invest more in condo development and create affordable apartments for the growing middle-class in Bangkok.
JR Kyushu’s plans for the future
Some might be surprised by this great expansion of the Japanese company in Southeast Asia. Others, who know the business climate in Japan and follow the work of this giant, know that this has been a long time coming. The company itself has made various statements about the potential condo development and that there is a potential for doing projects in Southeast Asia.
At the same time, the railroad giant has also said on multiple occasions that they are looking to find new businesses, switch to other markets, and expand their business efforts beyond Kyushu. This was one of the key points in the group’s business plan for 2016, 2017, and 2018. That is why these business moves are really not a surprise for those who were in the loop.
The goals are also to ensure that 62% of their operating revenue comes from businesses that have nothing to do with the railroads. Most businesses that are considered to earn such a revenue include restaurants and real estate development. The goal was set to achieve this result in 2018 and increase the revenue by 2% from non-railway related efforts, which was at 60% during 2015.
More and more Japanese companies to invest in Southeast Asia
A lot of analysts expect that we are going to see more and more investments from Japanese companies in Asian markets that have potential, as the growth of the market in Japan has slowed down. The first two countries that are on this list are Thailand and Indonesia, as they are the largest markets in this area and they are also expanding rapidly.
However, due to these large real estate investments and projects in Bangkok, the prices are already starting to rise and this might be a sign of an oversupply. However, the Japanese see the potential in offering housing to middle-class earners and they say that their number keeps growing. They also see the potential for renewing locations that are iconic and bringing a new light to them in an effort to attract new customers.
With the cooperation of their partners, it is expected that JR Kyushu, as well as other Japanese corporations, will invest more in Thailand, Malaysia, Indonesia, and throughout the whole Asia-Pacific region, establishing themselves as the new key players in the hospitality and real estate industry.
JR Kyushu is looking to diversify its real estate, hospitality, as well as beverage and food business to improve profitability. So far, it’s working for them. Time will show how these new projects and investments will work out in Southeast Asia. Up until now, their partners and representatives in these countries have been reporting positive results.