By Somluck Srimalee
"Overseas, we will focus only on Japan because this project will take up to three years to complete. We’re targeting returns of up to 10 per cent from hotels and over 10 per cent from real-estate projects," chief executive officer Chainid Ngowsirimanee told a news conference yesterday.
After the company acquires Kiroro Resort from Mitsui Fudosan, it plans to develop villas and condominiums worth Bt3 billion on part of the land near the resort. The residences will be aimed at both Japanese investors and foreigners from Asia such as Hong Kong, Singapore, Malaysia, Thailand and Indonesia, as well as Australia and Europe.
The project will be designed by International Alpine Design and commence presales and construction next year.
Condos will be offered for at least Bt10 million and villas at least Bt30 million.
Half of the funding for the project will come from internal cash flow and half from bank borrowings by its sub
sidiary in Japan, Share Group.
Part of the proceeds from issuing debentures worth Bt2.5 billion next quarter will also go to the property projects in Japan.
The company’s debt-to-equity ratio will rise to 1.2 times after it expands abroad from this year to 2014, Chainid said.
Sirirat Wongwattana, deputy chief supporting group officer, said this project would generate income to recoup the cost within three years because it was already in service and making Bt1.2 billion a year.
About 93 per cent of the hotel customers are from Japan and 7 per cent from abroad. However, the foreign market will be increased to 30 per cent by 2014 as Green House has been hired as the property manager, Sirirat said.
By 2014, 10 per cent of the group’s projected revenue of Bt20 billion will come from overseas, 10 per cent from upcountry Thailand and 80 per cent from Greater Bangkok.
Property Perfect’s revenue target for this year is still Bt12 billion. It earned Bt186.42 million on revenue of Bt4.35 billion in the first half.
Chainid said Kiroro Resort could be spun off.
"With the stability of revenue from Kiroro Resort, averaging Bt1.2 billion a year, we are studying the creation of a property fund for it that will be the way to manage its costs in the future," he said.
The company will focus on residential projects for sale in Greater Bangkok and also projects for rental income, such as a retail centre developed by its subsidiary V Retail and dormitories under the A Loft brand in Chiang Mai, in Salaya in Nakhon Pathom, and on Chaeng Wattana Road.
The company’s capital expenditure plan averages Bt3 billion to Bt3.5 billion a year. It will be financed out of internal cash flow, bank loans and the issuance of debentures worth Bt3 billion to Bt5 billion a year.