Yahoo Finance Isetan Mitsukoshi announces collaboration with One Bangkok
Isetan Mitsukoshi collaborates with TCC Assets, FPL, to open supermarket and acquire One Bangkok Office Tower 4
On May 21, Isetan Mitsukoshi Holdings announced that the company and One Bangkok Company are jointly participating “in the office and retail business of One Bangkok”. One Bangkok is the largest mixed-use development project in central Bangkok, currently 80% held by TCC Assets. SGX-listed Frasers Property Tq5 (FPL) owns a tad under 20% of the project.
Isetan Mitsukoshi says: “We are pleased to announce that the joint venture agreement was signed on April 5, 2024, and the signing ceremony was held in Bangkok, Thailand on May 17, 2024.”
According to Isetan Mistukoshi’s announcement, as part of its “second phase of a new overseas business model, we will collaborate with the TCC Group, which is involved in a number of real estate businesses mainly in Thailand, to develop a mixed-use office and retail business in Bangkok.”
Bangkok’s The Nation provides more details. “The joint venture revolves around two key elements: developing and operating the first Mitsukoshi supermarket and food hall in Thailand and co-investing in One Bangkok Office Tower 4 solidifying One Bangkok’s position as a global destination, which will attract top-level businesspeople, investors, and tourists, both local and international,” The Nation says.
Mitsukoshi supermarket will provide a “Depachika” concept supermarket and food hall, located within One Bangkok Retail, spanning more than 4,600 sq m on basement level 1 of the Parade.
In its statement, Isetan Mitsukoshi says it aims to achieve three goals with the collaboration. These are: maximise revenues by combining real estate operations rather than simply opening stores; acquire real estate business knowledge related to office space; and [collaborate] with TCC Assets and Frasers Property in Asean.
“In this medium- to long-term management plan, our oversea business strategy calls for "selection" and "transformation," and while promoting structural reform of our existing retail business, we will embark on a new overseas business model that aims to enhance the value of real estate and increase earnings by leveraging the know-how and goodwill we have cultivated in our domestic retail business, and we are aiming to acquire various real estate expertise in order to realize "urban Community Development" in the future,” Isetan Mistukoshi says.
The company, which owns 52.73% of Isetan (Singapore) has announced an offer for the shares of Isetan (Singapore) it does not own at $7.20. The undisturbed price of Isetan on March 26, prior to the announcement, was $2.84 versus its book net asset value (NAV) of $2.58. Based on the fair value of Isetan Singapore I15 ’s investment properties, the revaluation surplus works out at $6.86, or an RNAV of $9.44. Based on the data in Isetan Singapore’s annual report, if the valuation of all the properties are marked to market, the RNAV is above $10. Minority shareholders have said that the offer price is too low, and it would be fair if Isetan Mitsukoshi raises its offer to the RNAV of $9.44.
In the One Bangkok collaboration announcement, Isetan Mitsukoshi says “Southeast Asia is a priority area based on the growth potential of the economic scale, the psychological and geopolitical relationship with Japan, and the fact that "the Isetan Mitsukoshi Group has already opened stores in Singapore, Malaysia and the Philippines”. We also recognize that Thailand is a very attractive country geographically as the centre of Southeast Asia, with the second largest nominal GDP in Asean in 2023 and one of the highest tourist income in the world. Under these circumstances, we believe that the One Bangkok project, the largest-scale real estate mixed-use development in Bangkok undertaken by TCC Assets and Frasers Property, is a project that meets the objectives of the Isetan Mitsukoshi Group's overseas business strategy.”
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