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Japanese retail giant Takashimaya turns to Vietnam real estate market

Bich Phuong Monday | 11/30/2020 10:37

A rendering of a new commercial complex in Hanoi: Takashimaya is taking part in several large-scale projects in Vietnam as the company pushes into the real estate sector.

Japan’s retailer Takashimaya has turned to property development in Vietnam with commercial and office projects as the company's next engine for growth amid Covid-19 pandemic, Nikkei reported.

With the mainstay department store business, the Japanese retail giant is building a new urban center called Starlake six kilometers from downtown Hanoi.

It is investing 1.3 billion yen ($12.5 million) into the construction and operation of a K-12 school there in cooperation with Edufit International Education, a Vietnamese school operator.

The Japanese company will also develop commercial and office space at Starlake between 2022 and 2025, along with two separate large-scale commercial projects elsewhere in the capital city. It will renovate several mixed-use buildings as well that it acquired in Ho Chi Minh City and Hanoi last year.

This is the first ever overseas property development in which it would be involved all the way from land acquisition to operation, and it plans to invest 20 billion yen ($191.39 million) abroad in the next three or four years.

The Hanoi work represents the first foreign property project in which the company has been involved every step of the way, from land acquisition to operations.

Takashimaya department stores in Japan accounted for less than 20 percent of total operating profit in fiscal 2019, despite making 80 percent of total revenue -- a sharp contrast to the property development business, which generated about 40 percent of operating profit on less than 10 percent of revenue.

Department stores, both in Japan and overseas, are only expected to face further challenges from the coronavirus, Nikkei said.

"There's a lot of room for us to expand our portfolio in many different fields in Vietnam," Takashimaya President Yoshio Murata was quoted by Nikkei.

Source: Nikkei Asian Review

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