The Japan News by The Yomiuri Shimbun
Japan real estate developers see opportunities in Southeast Asia
BANGKOK — Japan-a liated real estate developers are ramping up their e orts in Southeast Asia on the back of the area’s recovering economy. ough the novel coronavirus pandemic temporarily halted construction and sales, recent property-market splurges by the wealthy and middle class have helped spur business activity, which is increasingly returning to pre-pandemic levels. However, real estate companies are now facing fresh challenges, such as soaring material costs and labor shortages.
On the outskirts of Bangkok, construction is proceeding apace on a 115-unit condominium being jointly developed by Kanden Realty and Development Co. and its local partner. e developers hope to woo wealthy local residents with a special “clubhouse” that features a tness center and other facilities.
Construction was suspended in summer 2021 due to the pandemic, but work has now resumed with an eye on a spring opening.
“At one point, the future was uncertain,” said Kensaku Tanabe, head of the company’s Bangkok o ce. “But as ailand’s real estate market has recovered, we’ve been speeding up the work process.”
In July, Mitsui Fudosan Co. announced its intention to open four serviced
apartment properties in ailand. “e timing of the announcement re
ects the ai government’s continued easing of entry restrictions for foreign travelers,” said an o cial of the company’s public relations section.
MARKET POTENTIAL
Japan-a liated companies are targeting Southeast Asia’s burgeoning wealthy and middle classes.
According to the World Bank, Malaysia’s gross domestic product was $11,371 per capita in 2021, about three times higher than 20 years ago, while the gure for ailand was $7,233, a fourfold increase over the same time span. ese
gures would likely be even higher if the data was limited to large cities.
In general, when per capita GDP exceeds
$3,000, a country is regarded as being a full- edged consumer society. In light of this, the potential demand for real estate projects in Southeast Asia is high.
Although Southeast Asian countries have restrictions on foreign nationals purchasing real estate, observers say regulations are relatively loose for highend condominiums and other properties in urban areas in an e ort to attract overseas investment.
Prior to the pandemic, many Chinese and other foreign nationals purchased such properties, but this trend gradually slowed, partly due to coronavirus-related travel restrictions. Now, however, the property market is being increasingly buoyed by local residents’ purchasing power.
Nomura Real Estate Development Co. and Isetan Mitsukoshi Holdings Ltd. are developing a complex in Manila’s metropolitan area that includes condominium towers and commercial facilities. e highend residential properties are designed around Japanese concepts and have been selling well among rich local residents.
“Some wealthy people in Southeast Asian own two properties — one in the city center and another in the suburbs,” said a person with close ties to a major Japan-a liated company. “e market is solid.”
CHALLENGES AHEAD
New challenges have emerged, however. Material prices have skyrocketed due to global in ation triggered by Russia’s invasion of Ukraine, and wage increases for local workers will be necessary to keep pace with rising prices, which will eventually a ect property prices.
In some countries, such as Vietnam, real estate markets have already shown signs of overheating, which could lead to further price hikes. ere is also a shortage of labor in Southeast Asia. In
ailand and Malaysia, for example, many foreign workers temporarily returned to their home countries amid the pandemic. But reentry procedures take time, which has been exacerbating the dearth of manpower.
An o cial of a major Japan-a liated company operating in ailand said: “If the worker shortage becomes serious, it may delay our plans. We’re making every e ort to secure human resources.” (Oct. 26)