Kajima takes on $400m urban development project in Myanmar
Japanese contractor will construct hotels, office building and library
General contractor Kajima will sign up for a 45 billion yen ($398 million) urban development project in Yangon, building offices, hotels and other facilities in bringing its city planning expertise to Myanmar.
A contract with the Ministry of Construction will be inked Saturday. The build-operate-transfer arrangement will give the Japanese company control of the facilities and land for up to 70 years.
In a residential area of Yangon where many office buildings are being constructed, Kajima will put up a 21-story office building, a 20-story hotel, a 27-story extended-stay hotel and commercial facilities on ministry-owned land. Floor space will total 170,000 sq. meters.
The project will include open space to help ease traffic congestion, as well as a children’s library. A food and water storage system will also be created for disasters and other emergencies. Kajima expects to generate a profit commensurate with the outlays.
When representatives of the Myanmar and Japanese governments met back in 2015, Japanese companies were called upon to craft a model for making use of government land in the Southeast Asian nation via a private-public initiative.
On behalf of the Japanese land ministry, the Japan Conference on Overseas Development of Eco-Cities picked Kajima to handle a project. This would mark the first under the framework and could serve as a model for exporting Japanese urban planning expertise to greater Asia.
Real estate development has picked up since Myanmar began democratizing in 2011, with demand for urban development on the rise. Posco Daewoo of South Korea opened this September a large Lotte luxury hotel in Yangon with more than 600 guest rooms, including serviced apartments.
Many foreign companies are setting up factories in Myanmar, where the economy is growing at a roughly 6% annual clip.
Partners including Mitsubishi Corp. and Mitsubishi Estate have been working with a local developer on a major mixed-use project since February.
Kajima’s project will likely be the largest undertaken by Japanese entities alone.
he infrastructure market in Myanmar is estimated at some $130 billion. Developers from Thailand, India and elsewhere in Asia are also entering. Singaporean conglomerate Sembcorp Industries is building a fossil-fuel power plant in Mandalay, Myanmar’s second-largest city.