Bangkok Properties to Get an Investment Boost from Hankyu

July 17, 2018

Placing their confidence in the resilient Thai economy, Hankyu Hanshin Properties Corp. commits to investing nearly 3 billion baht or 10 billion yen worth of joint ventures with Sena Development PLC. The Japanese firm will mainly invest in living accommodations to address rising demand for residential spaces.

In the last fiscal year, Hankyu poured in 10 billion yen. General manager for management planning and executive vice president Yusuke Kusu said the company may double that amount for their upcoming residential projects.

As Thailand's population continues to grow, demand for living quarters subsequently rises. Through their joint venture with the SET-listed real estate company Sena, Hankyu will allot 10 billion yen for residential developments each year until 2031 when population growth rate in Thailand will reach its peak.

Thriving Condo Market in Bangkok

The Japanese firm's trust and confidence in Bangkok properties stems from impressive presales record during its first two joint ventures in the city (also with Sena). The local condo market responded well to Hankyu's initial investments. One venture, the 3.4 billion baht Niche Mono Sukhumvit-Bearing, sold 80 percent of units within a few months since launching.

Another venture, Niche Pride Taopoon-Interchange which incurred the same development cost, sold out 80 percent of all units. And it was only launched last March 2018.

Due to growth opportunities in unit prices between 2 and 3 million baht, executive vice president Kusu said the company will target this market segment. Their partnership with Sena is expected to help them cope with high mortgage rejection rates and produce effective marketing strategies.

ROI on Bangkok Properties

Hankyu's development priorities include, among others, single house and townhouse projects. They will also look into building a logistics centre and developing commercial and office property in Bangkok.

Since 2015, the Japanese firm has invested a whopping 20 billion yen across six Southeast Asian countries. From residential structures in Thailand, the Philippines, Malaysia and Vietnam to logistics and residential investments in Indonesia, Hankyu's investments have come a long way.

Thailand will have the biggest return on investment among ASEAN countries, said Kusu. Although the company has several real estate investments in Vietnam, more project developments have been commissioned in Thailand.

Economic Recovery

The property market will see an upward growth trend in the second half until the end of the fiscal year. With the local economy recovering from first and second quarter setbacks, Hankyu's investment ventures are timely.

Demand for upper-end residential accommodations near transit lines is likewise growing. To capitalise on this demand, the first luxury condo project will launch in August.

Billed as Piti Ekkamai, this 5-million baht development project will be the third joint venture between Sena and Hankyu. Unit prices will start from 4.45 baht.

Piti Ekkamai spans 4.5 rai and sits at Ekkamai Soi 26. It will stand as a 37-storey building, encompassing 897 units.

Sena will also be launching real estate projects across five different locations between the third and fourth quarters. Target locations include Charoen Nakhon, Punnawithi and Bang Na. Its shares on the Stock Exchange of Thailand recently traded at 1.39 million baht with shares closing at 3.62 baht.

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