JR Kyushu investing in South East Asia real estate

JR Kyushu, which is benefiting from a tourism boom with record numbers of visitors to Japan, gets most of its profits from real estate and station buildings. The company said in its mid-term plan it aims to spend 80 billion yen over three years on some sectors that will help boost sales from non-rail sources as the population on the island declines.

It was seeking to raise as much as 416 billion yen in an IPO, and planned to reduce its reliance on Japan by investing in residential and office properties in Southeast Asia.

Investing in Southeast Asia will be a first for the company, which owns five restaurants in China. Japan makes up almost all of the company’s revenue, according to data compiled by Bloomberg. In addition to real estate, the company also operates restaurants in Shanghai and Tokyo. JR Central, the nation’s busiest bullet train operator, also has a restaurant in London.

According to the Chairman, Southeast Asia offers huge growth potential for JR Kyushu. JR Kyushu plans to expand its non-rail sales to more than 62 percent of revenue by March 2019, from 57.5 percent in the year ended March 2012, according to the mid-term plan. Sales are forecast to increase to 400 billion yen in the same period, from 333 billion yen seven years earlier.

The company expects at least as many tourists to Kyushu this year as the 2.8 million who visited last year, as the island recovers from the earthquakes in Kumamoto prefecture in April, Karaike said.

“Foreign visitors from Asia used to come to Japan for the purpose of massive shopping, but their interest is shifting to culture, history, dining, and other aspects that are only available in Japan,” the executive said.

Based in Fukuoka City, about 890 kilometers (550 miles) southwest of Tokyo, the JR Kyushu is benefiting from record overseas visitors to Japan, spurring demand for its hotels, shops and restaurants, as well as train travel. Visitors to Kyushu from overseas reached 2.8 million last year, more than doubling from 1.3 million two years earlier, according to the transport ministry.

https://www.bloomberg.com/news/articles/2016-10-11/ipo-candidate-jr-kyushu-scouts-property-deals-in-southeast-asia

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