SET-listed developer SC Asset Corporation Plc, a property arm owned by the Shinawatra family, has joined with Japanese conglomerate Nishitetsu Group to launch a luxury condo project, the Crest, near the Lat Phrao intersection next year.
SC chief executive Nuttaphong Kunakornwong said the partnership will lead to future joint ventures because SC's roadmap for 2020 includes investment in other property categories.
Nishitetsu is made up of 85 companies, including Nishi-Nippon Railroad Co Ltd as the core business.
The group's operations cover a range of fields, from transport and real estate to distribution, international logistics and hotels.
Founded in 1948, Nishitetsu Group is headquartered in Fukuoka. Turnover this year will total nearly ¥380 billion (111.1 billion baht).
SC reported yesterday that the company and Nishitetsu set up a joint venture firm, SC NNR1 Co, with registered capital of 1.2 billion baht. SC holds 55% and Nishitetsu 45%.
The first joint venture project, the Crest condominium, will sit on a 1.9-rai plot near the Lat Phrao intersection, one of Bangkok's prime locations and a connection point of future mass transit lines.
Hiroshige Horie, senior executive officer and general manager of Nishi-Nippon Railroad's housing business division, said Thailand has social and economic growth with a culture similar to Japan's.
The group previously expanded in the US, Vietnam and Indonesia.
Therdsak Thaveeteeratham, executive vice-president for the research division at Asia Plus Securities Co, said the joint venture with Japanese firms will help finance Thai property development with needed funds.
"Pre-1997 financial crisis, Thai developers' debt-to-equity ratio was as high as 10-11 times," he said. "Now having foreign partners can help them diversify risk."
Partnership with foreign firms can also draw new demand from foreign buyers as local demand next year looks increasingly weak.
There are many negative factors lying ahead, like the central bank's new lending curbs and rising interest rates, Mr Therdsak said.
Access to sources of funds will also help large developers grow and enlarge market share at the expense of smaller developers.
Mr Therdsak said most of the joint venture projects are in Greater Bangkok, as demand in the provinces is not substantial enough to do large-scale projects worth 2-5 billion baht.
SC shares closed yesterday on the Stock Exchange of Thailand at 2.94 baht, down four satang, in trade worth 1.4 million baht.
