TOKYO -- Real estate developer Haseko will develop a condominium building in Vietnam in collaboration with local giant Him Lam Group.
The two have set up a joint venture, with Haseko holding a 95% stake. This marks the first overseas expansion by the Japanese company since 1988.
The property will be about 5km from central Hanoi and span about 1,600 sq. meters. Construction will start as early as this spring and be completed in 2017. Project costs are estimated at 2 billion yen ($16.7 million).
The building will have 110 units for lease and feature auto-lock and concierge services. Monthly rents will range from $1,000 to $3,000. The duo expect brisk demand as more Japanese workers are assigned to overseas posts and in light of growing ranks of the affluent in Southeast Asia.
The property also will have a hot-water tank that secures enough water for frequent baths. Japanese people take baths daily.
In Vietnam, about 30,000 condo units are released to the market yearly, research company CBRE said. With demand expected to grow as income levels rise, more projects will begin in other parts of the country, including Ho Chi Minh City.
Haseko also will seek partnerships with other local partners, targeting eventually to command a 10% share in the country's condo market.
Haseko launched its overseas operations in Hawaii in 1973 and later developed properties in New York. But from 1999, it gradually withdrew from overseas businesses except for Hawaii in order to write off nonperforming loans in the aftermath of the Japanese economy's bubble burst.
The company again is focusing on the overseas market as growth prospects are limited back home. The number of newly released condos in the Tokyo area dropped from the peak of 95,000 in 2000 to 45,000 in 2014. With the number of Japanese households expected to shrink starting in the 2020s, Haseko needs new earnings opportunities.