Siam Future Development

Despite the flood threat, Ikano, the operator of Ikea has confirmed the launch of its first mega-store today, but with a “soft” instead of a “wow” opening. Its grand opening will now be postponed till early next year along with other tenants at the official launch of Mega Bangna project in May 2012. In addition, its Bt20m budget for the opening celebration will now be earmarked for donation to the flood victims.

Our view: Expected success hit at its Mega Bangna project will benefit SF in its new community mall projects

We view this as a positive development for IKEA, as it should set to benefit from the huge renovation bill from Bangkokian’s homeowner. As noted in our investment strategy published on 31Oct, the renovation bill alone will be Bt32-132bn as over 300,000 houses has now been affected by the worst flood crisis. Furthermore, IKEA’s DIY and ready-to-move furniture could be a new trend for the Thais, as Ikea furniture are more flexible and mobile compared with the traditional built-in counterparts. All in all, SF is set to indirectly benefit from this development, as high traffic from Mega Bangna project through IKEA launch should allow SF to easily secure new tenants given the expected success hit of this mega project.