A cityscape of Mumbai, Maharashtra, India. — Hardik Joshi/Unsplash
BANGKOK: Major Japanese real estate companies are broadening their presence throughout Asia amid rising demand for high-quality office and residential buildings and as emerging economies such as India’s see an uptick in corporate activity and income levels.
Sumitomo Realty and Development Co is involved in three large-scale projects in Mumbai, a commercial hub home to several financial institutions.
Sumitomo places Mumbai after central Tokyo as its “second engine” driving the company’s growth and plans to invest a total of 700 billion yen in the city.
In October 2023, Sumitomo acquired a roughly 80,000sq m site in Mumbai’s new urban centre to develop a large complex comprising office and commercial space.
The company also plans to construct office buildings at two other locations within the city.
“We have received inquiries from prospective tenants, including major companies in India and Western financial institutions,” said Hironori Kawahara, managing director at the company’s Indian subsidiary.
Other Japanese real estate companies are developing facilities in southern India.
Mitsui Fudosan Co is constructing an office building in Bangalore, and Mitsubishi Estate Home Co is involved in a project to develop a business park in Chennai.
As of the end of March, the average annual rental rate of an office in Mumbai was $421 per square metre, surpassing that of Osaka at US$371, according to a survey on rents in major cities in the Asia-Pacific region conducted by property consultants Jones Lang LaSalle IP, Inc (JLL).
Demand for office space is expected to increase in Indian cities, as foreign companies are increasing their presence there.
Some developers are involved in residential projects.
Tokyu Corp, for instance, is building a new 10-square-kilometre urban development project in Binh Duong Province, southern Vietnam, consisting of condominiums, commercial facilities and other buildings.
Nomura Real Estate Development Co is involved in 26 projects, including the construction of condominiums, mainly in Bangkok.
According to JLL, global real estate investment fell 6% year-on-year over the January-March period in 2024. Rising interest rates, which slowed down investments in the West, were the main cause of the decline. On the other hand, real estate investment increased 13% in the Asia-Pacific region over the same period. — The Japan News/ANN
