Singha Estate sets strategic push to nearly double revenue in 2022

MONDAY, MARCH 21, 2022

Singha Estate Plc on Monday unveiled the company’s ambitious 2022 business direction, aiming to nearly double year-on-year (YoY) growth to a new high of 13.4 billion baht. The company aims to achieve this through well-diversified portfolios, as well as collaborating with strategic partners to strengthen its four core businesses.

Singha Estate also announced its vision to grow at 25 per cent compounded annual growth rate within five years by exploring new business opportunities that respond to mega-trends and complement the synergy across existing businesses and enhancing strategic partner collaboration.

Thitima Rungkwansiriroj, chief executive officer of Singha Estate Plc, said the company's strategies during the past two years have been aimed at diversifying investment across all four core and connected businesses.

She was confident that negative sentiments, such as Covid-19, the Russia-Ukraine conflict and inflation, would not affect the company's operations.

"In 2022, we continue to be even stronger, both in terms of revenue and financial stability, through projects in the pipeline, joint-venture projects, as well as having a long-term lease of premium assets with S Prime Growth Leasehold Real Estate Investment Trust [SPRIME],” she said.

“We expect 2022 revenue to nearly double YoY, from THB7.74 billion to THB13.4 billion.”

Singha Estate sets strategic push to nearly double revenue in 2022

Around 25 per cent of total revenue will be generated from the residential business, 8 per cent from commercial business, 4 per cent will come from the industrial estate and other businesses, while 63 per cent will come from the hospitality business, she said.

Around 50 per cent of revenue in the residential business is expected from the transfer of two ready-to-move-in condominium projects — The Esse at Singha Complex and The Esse Asoke, and the luxury housing project Santiburi the Residences — whose backlog is at THB2.6 billion. The company expects to realise around 70 per cent of the backlog as revenue this year.

In addition, Singha Estate plans to launch another housing project, worth 2.9 billion baht, located in the Patthanakarn area by the second half of this year. The new project’s revenue is expected to be recognised within 2022.

In commercial business, it will officially launch S Oasis, the new premium office building with retail spaces in Lat Phrao district, having approximately 55,700 square metres of total space. Singha Estate expects around 50 per cent occupancy rate in the year of the launch.

The company also plans to relaunch S Metro, a prime office building in Bangkok’s Phrom Phong area.

The hospitality business has seen exponential growth since last year and is expected to grow 88 per cent, generating revenue of THB8.5 billion, she said. It would make the company the No. 2 hotel operator in terms of revenue.

A well-diversified strategy allowed the company to have properties in the key travel destinations around many regions of the world, particularly in the world’s major growth engines such as the UK and the Maldives, she said.

There is upside growth potential if the tourism and hospitality business pick up later in the year, Thitima added.

Singha Estate sets strategic push to nearly double revenue in 2022

In addition, the company has continued to develop and renovate high potential properties through asset rotation, upgrading services and offerings to cater to more diverse targets. For example, adding pool villa-type accommodation in the Maldives properties to respond to the demand of guests from the Middle East, she explained.

The average daily rate has increased to v10-20 per cent and once all renovation is completed, the company expects a 40 per cent increase in profit.

The industrial estate business is ready to start realising income for the first time in 2022 through sales and land transfer after the company invested and developed the land, utility system, and infrastructure last year. Singha Estate expects to transfer 15 per cent of the 992 rai (158.72 hectares) of the total area of the industrial estate.

Singha Estate sets strategic push to nearly double revenue in 2022

During the past years, Singha Estate has forged several partnerships to enhance investment capability and project development across all business portfolios.

For example, the partnership with Hong Kong Land for higher outreach to potential foreign buyers in the ultimate-luxury condominium project The Esse Sukhumvit 36, valued at 5.9 billion baht, and the joint venture project with Wai Eco World Developer to develop 80 luxury villas at SO/ Maldives, the newest addition to the two existing resorts at Crossroads Maldives.

Also, Singha Estate plans a long-term lease agreement of three premium office buildings and retail space with SPRIME.

The move will uplift SPRIME to No. 1 position in Office Real Estate Investment Trust.

Since the end of 2021, Singha Estate has invested in the industrial estate and infrastructure business and holds a 30 per cent ownership of B.Grimm Power (Angthong) 1 Limited, operating a 123MW combined cycle co-generation power plant. In 2022, the company will be able to realise revenue from the first full-year performance.

The company has two joint venture projects in B.Grimm Power (Angthong province) 2 Limited and B.Grimm Power (Angthong) 3 Limited, to operate the cycle co-generation power plant with a total of 280MW, which is expected to start commercial operation in 2023.

Thitima said the company’s vision and business direction in the next five years will leverage the strength of the four well-established business pillars to create an internal synergy, leading to new business opportunities that strengthen its business portfolio and meet market demands.