Mitsubishi Estate will make a full entry into agriculture through a capital partnership with a major domestic horticulture company, with an eye to taking technology-based farming abroad.
The Japanese real estate company is teaming up with Okayama Prefecture-based Sara, a specialist in cutting-edge greenhouse facilities. Mitsubishi Estate aims to generate annual sales of about 30 billion yen ($280 million) from this undertaking in 10 years as it anticipates growth in efficient greenhouse farming. The size of the capital stake was not disclosed.
Sara grows tomatoes, lettuce and bell peppers in greenhouses. The total cultivation area measures roughly 11 hectares, among the largest in Japan for indoor farming. Plans call for setting up biomass power plants next to greenhouses to supply the necessary electricity.
A Mitsubishi Estate subsidiary has been growing 80 tons of high-sugar tomatoes annually at a roughly 1-hectare facility in Chiba Prefecture. But Sara ships 50 times that amount in tomatoes. Mitsubishi Estate aims to absorb Sara's know-how in large-scale indoor farming in which computers are used to control the temperature and humidity in greenhouses to enable stable vegetable shipments year-round.
Mitsubishi Estate plans to increase the volume and variety of vegetables that it grows by building more facilities in Japan. In addition to supplying the produce to domestic restaurants and other businesses, it may sell processed goods. By eventually growing and selling in Southeast Asia as well, the company aims to boost its total growing area to 50 hectares by around 2030.
Mitsubishi Estate sees indoor farming as a growth field, just as with logistics facilities, and is aiming for synergies with existing businesses. The agriculture business of new entrants from outside sectors in Japan is projected to reach 127.7 billion yen in fiscal 2024, doubling from fiscal 2017, according to the Yano Research Institute.