TOKYO -- Singapore state-backed investment company Temasek Holdings' subsidiary Surbana Jurong and Japan's Mitsubishi Corp. will collaborate on urban building projects across Southeast Asia and beyond, with plans to recruit other partners for $2.5 billion in developments over five years.
The comprehensive urban development packages will include transportation infrastructure like rail and roads, as well as housing, shopping centers, hospitals and other community building blocks.
Temasek-owned urban design unit Surbana Jurong and Mitsubishi will set up a 50-50 joint venture this year to undertake projects in countries including Myanmar, Vietnam, Indonesia, the Philippines, India and Sri Lanka.
The venture will raise funding from other investors, including financial institutions and big local companies, as needed for each project.
As Southeast Asia's population grows, the Asian Development Bank predicts the region will require $3.1 trillion of infrastructure investments between 2016 and 2030.
Temasek, a key shareholder in companies like Singapore Airlines, manages a portfolio of more than $200 billion in assets. Surbana Jurong has taken part in urban development projects in about 40 countries, but this will be its first role as a main developer.
Under the joint venture, Surbana Jurong will oversee land selection, overall planning and design. Mitsubishi will create funding plans and bring together participants with the right expertise.
The Japanese trading house has developed residential properties and won a railway order in Southeast Asia. This venture with Temasek marks its first involvement in urban development projects of this scale.
Japanese companies' participation in Asia's urban development has mostly been in one-off projects. Mitsubishi's partnership with Temasek is unique in that it involves a state-backed company from Southeast Asia and covers multiple cities.
Elsewhere in Asia, trading house Mitsui & Co. is participating in the Iskandar Malaysia project, a planned high-tech metropolis. Sumitomo Corp. is building condominiums in India with local conglomerate Krishna Group.