Katsuhito Ozawa, executive managing officer and chief financial officer of Tokyo Tatemono, far left, and Adrian Lee, centre, chief executive of Raimon Land Plc, sign the deal.

Japanese real estate firm Tokyo Tatemono Co has vowed to forge a joint venture with SET-listed developer Raimon Land Plc in residential development, with at least two projects worth 10 billion baht a year after agreeing yesterday to co-invest.

Katsuhito Ozawa, executive managing officer and chief financial officer of Tokyo Tatemono, said Thailand is the fourth country in Southeast Asia the company will be making an investment in for 2016-19.

"We are confident in Thailand's economic growth, which is stable and keeps rising," he said. "Our investment will focus on residential development. We are also interested in senior living and provinces other than Bangkok."

Under the agreement signed yesterday, Tokyo Tatemono will invest in Raimon Land's two existing subsidiaries -- Raimon Land Sathorn Co (RLS) and Raimon Land Twenty Six Co (RLTS) -- holding a 49% stake in each.

With the Japanese partner, RLS and RLTS will raise their registered capital from 5 million baht to 964.3 million, and from 100 million baht to 1.2 billion, respectively, by the second quarter next year.

RLS plans to develop a condominium project on Sathon Soi 12 with at least 200 units worth 4.2 billion baht, while RLTS wants to develop a condo project on Sukhumvit Soi 26 with 150 units worth 4.9 billion baht. Both are scheduled to launch in the second half this year.

Adrian Lee, Raimon Land's chief executive, said the joint venture will help boost the company's revenue from 3-5 billion baht in the past two years to 10-12 billion in 2023.

This year Raimon Land expects to spend 4 billion baht to buy new plots for residential development. It is also exploring potential investments in hotels and developing senior living and wellness centres through a joint venture with the Japanese partner, said Mr Lee.

The 122-year-old Japanese firm first invested in Southeast Asia in 1995 in Yangon and Ho Chi Minh City, mainly in serviced apartments, before withdrawing in 1997 due to the Asian financial crisis.

Tokyo Tatemono returned to the region in 2013 with the establishment of a subsidiary, Tokyo Tatemono Asia Pte, in Singapore, before acquiring and redeveloping a 57,500-square-metre office tower worth 25 billion baht in Singapore in 2016.

A year later it invested in a mixed-use project in Yangon worth 10.5 billion baht, then a residential project in Jakarta earlier this year. From 2016-18, total equity for the region is estimated at ¥20 billion (5.81 billion baht), said Mr Ozawa.

Tokyo Tatemono is the ninth Japanese property firm to enter a joint venture with Thai developers since 2013.

From 2013-18, the value of Thai-Japanese joint ventures in property projects from 18 Thai and Japanese developers totals over 220 billion baht.

The largest one is the joint venture between Ananda Development Plc and Mitsui Fudosan in 27 projects worth a combined 114 billion baht, said Phattarachai Taweewong, senior manager of research at property consultant Colliers International Thailand.

Japan was the largest foreign investor in property development joint ventures during 2013-17, accounting for more than 70%. That figure should rise to 73% this year, said property consultant CBRE Thailand.

JLL reported developers and institutions in Japan are seeking better returns overseas. Japan's outbound real estate investment in 2017 was nearly $3.5 billion (109 billion baht), 70% more than in 2016.