OSAKA -- Nishi-Nippon Railroad, commonly known as Nishitetsu, and Hankyu Hanshin Holdings are joining to develop condominiums in Vietnam, seeking to offset flagging railway revenue in Japan due to a declining birthrate.
Nishitetsu and Hankyu Hanshin subsidiary Hankyu Realty setting up a joint venture with a major local real estate company. Each of the Japanese concerns has a 20% stake, with the Vietnamese partner holding the other 60%. An announcement is expected as early as Tuesday.
The joint venture will initially develop 500 units in Ho Chi Minh City. Each will have around 50 sq. meters of floor space and sell for around 10 million yen ($83,000), targeting wealthy consumers. The condos will carry the local real estate company's luxury brand name.
The Japanese partners will put up 1 billion yen apiece toward the project's total cost of some 3 billion yen. Construction will begin this month, with completion targeted for fiscal 2016.
This marks the first time for Nishitetsu and Hankyu Realty to develop real estate overseas. It is also rare for private Japanese railway operators to join forces in business development abroad.