Daiei backs out of JT redevelopment project

Major supermarket chain operator Daiei Inc. announced Monday it will not take part in a redevelopment project at the site of a former Japan Tobacco Inc. plant in Tokyo.

It is the first time Daiei has bowed out of a large-scale project already under way. Sources familiar with the redevelopment plan said the project may have to be reviewed.

Daiei and Japan Tobacco reached a basic agreement in September 1997 in which the retailer would acquire a 22-story office building at the site in Tokyo's Shinagawa Ward. It was also expected to set up a supermarket branch in the complex.

Daiei officials cited a need to use its funds for more urgent purposes such as redecorating existing shops and developing additional supermarkets instead of entering other business areas.

The redevelopment plan aims to turn the site into one that offers, among other facilities, a hotel, residential buildings and four office buildings.