Cabinet endorses development project in Siam Square
Chulalongkorn University has won the Cabinet's approval for the development of its parking area, near Novotel Siam Square Hotel, into a commercial building which could require an investment of over Bt3 billion.
Deputy Government Spokesman Pakdeeharn Himathongkham said that the 34-floor building will have 7,315 square metres in usable space.
"The university's study shows that if the building is operated as a hotel, the investment would reach Bt2.5 billion, with the 7.5-year break-even point. For an office building, it will require an investment of Bt1.9 billion, with the 11.14-year break-even point. In both cases, the annual rents payable to the university, as the land owner, are estimated to be Bt217.62 million for a 20-year leasing contract, Bt304.5 million for 25-year contract and Bt410.19 million for 30-year contract," he said.
The university has been waiting for the Cabinet's approval for a few years, as joint private investment is sought. It will have to come under the Public-Private Joint Venture Act, as the project value exceeds Bt1 billion.
The Finance Ministry also instructed Chulalongkorn University to revise the revenue-sharing structure, suggesting that aside from land rents the university should enjoy parts of the above-forecast commercial returns. Currently, MBK Centre and Novotel Siam Square are also subjected to the same condition. It is also instructed to work with related agencies on how to ease traffic congestion and pollution in the area, once the project is completed.
The project is divided into two phases.
The first 10 floors with 50,000 sqm in space would be invested and managed by Chulalongkorn University. This will consist of commercial shops and parking lots.
The concession of the next 24 floors with 30,000 sqm will be awarded to a private developer, for the development as an office building or a hotel.
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