Thursday, August 06, 2020

B&G Park bets on bright future for premium office space despite Covid-19 setback

Jul 02. 2020
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By THE NATION

B&G Park Co Ltd (B&G), a developer of commercial real estate projects, aims to make its brand a leader within Asean in office building and hotel real estate development.

It plans to raise funds in the third quarter of the year after the Security Exchange Commission (SEC)’s approval to set up BG Real Estate Investment Trust.

The company is confident that the demand for office buildings will continue to grow despite the change in work behaviour and in choosing the size of rental spaces due to the Covid-19 pandemic.

Theprit Srichawla, director of B&G, said the company specialised in commercial real estate development branching into two main groups -- tourism and hotels -- at home and abroad,. They include Avani Hua Hin Resort & Villas and office buildings such as Interchange 21 building in the heart of the Asoke-Sukhumvit CBD area near the BTS Asoke Station and MRT Sukhumvit Station.

Theprit said the trend of office buildings for the rent market after the Covid-19 outbreak could change as some businesses may reduce their investment. But the demand for office space rental will remain albeit in a different format. This may be in the form of reduced floor area to suit the work-from-home behavioural trend, he added.

Theprit Srichawla

He said the company has been well prepared and had made adjustments prior to the crisis through a strategy to manage office rental space, and to have close and regular communication with tenants. In addition, the company has concluded that to reset rental prices to compete with other operators of office buildings for rent is not a proper strategy in the present environment. "The more ideal solution would be to provide convenience and services that will support the tenants’ operations," Theprit said.

“During this period, the company adopted active measures to help the tenants by arranging office areas. The building had a variety of businesses that were small tenants, and the company helped the tenants affected by the imposition of the emergency decree by waiving the rents... The company has reduced the rents on a case-by-case basis to provide flexibility that would allow the tenants to carry on with their businesses. These support measures are expected to end soon. Therefore, this situation will not significantly impact the tenants in their ability to rent the office spaces and we are confident that this will not affect the investment of the BGREIT that will occur in the near future,” Theprit added.

Lately, the company has set up a trust fund to raise capital for the Interchange 21 project.

The SEC has started its consideration of the initial public offering application and the filing of B&G Leasehold Real Estate Investment Trust (BGREIT). B&G REIT Management Co Ltd, a B&G subsidiary, will manage the trust fund while Siam Commercial Bank Plc will be the financial adviser. BGREIT will initially invest in the Interchange 21 project for approximately 25 years with registered capital of not more than Bt8.043 billion, consisting of Bt6.543 billion in raised funds and Bt1.5 billion in long-term loans. The company is expected to be approved for listing on the Stock Exchange of Thailand within the third quarter of 2020.

 

 

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