TOKYO -- Japanese railway companies are taking a rare opportunity to join hands for an overseas real estate project.
A consortium led by trading house Mitsubishi Corp. plans to invest about 10 billion yen ($95 million) in an urban development project in Indonesia. Consortium members Nishi-Nippon Railroad, Hanshin Electric Railway and Keikyu Corp. are seeking new revenue sources elsewhere in Asia as domestic opportunities are expected to decline amid Japan's shrinking and graying population.
The Japanese consortium and an affiliate of Sinarmas Land, a leading Indonesian real estate company, plan to form a joint venture for the project. Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development, a public-private fund, is also a member of the Japanese camp.
The partnership plans to build some 1,000 residential units, including stand-alone houses and residential complexes with commercial facilities, in the development site in South Tangerang, part of the greater Jakarta metropolitan area. Construction will start next year, and total project spending is expected to be around $200 million to $300 million.
There are already some large shopping outlets in the area, including a mall belonging to Japanese retailer Aeon. The project team expects the local population will continue to grow.
The site is about 6km from a train station on a railway connection to downtown Jakarta. The three Japanese railway companies will bring to the project their know-how in developing bus routes and other local transportation networks in new towns, an expertise they have gained from suburban development projects in their home market.