Mitsubishi Estate Group eyes inner Bangkok offices
29 May 2019
Mitsubishi Estate Group, one of Japan’s largest real estate firms, remains upbeat on Thailand, eyeing logistics in outer Bangkok as a next venture after co-investing with SET-listed developer Raimon Land Plc to build a high-end office tower this year.
Shigehiro Ono, executive director of Mitsubishi Estate Asia, said the company has confidence in the medium and long term in Thailand, though it has minor concerns in the short term.
“Thailand is a strategic location in Asia,” he said. “The most attractive sector in real estate [to invest in] is Grade A offices in inner Bangkok, followed by logistics in outer city locations.”
Escalating US-China trade tensions might shift production bases from China to Thailand, particularly the Eastern Economic Corridor (EEC), but Mitsubishi will still focus on Bangkok, said Mr Ono.
“We have no plan at the moment to invest in the next few years as we want to focus on the office tower we co-invested in with Raimon Land,” he said. “If the EEC attracts new investment, Bangkok should benefit as well.”
Mitsubishi Estate entered the Thai property market in 2013 via joint ventures with SET-listed developer AP Thailand Plc for 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 as the sector was robust, with strong demand and low vacancy. But AP was not interested in non-residential development, so Mitsubishi joined with Raimon Land for an office tower on Ploenchit Road.
“The office will be financed with fresh funds from Japan of less than 1.7 billion baht,” said Mr Ono.
The plot is sized six rai and Raimon Land signed a leasehold contract in late 2016. With total investment of 8.8 billion baht, Raimon Land and Mitsubishi plan to develop a 61-storey tower with a lettable area of 61,000 square metres.
Raimon Land chief executive Lionel Lee said construction of One City Centre is due to finish in late 2022.
RML shares closed unchanged yesterday on the SET at 1.21 baht in trade of 527,500 baht.