Singha Estate adopts 3 game-changing deals for revival after Covid crisis

Singha Estate’s decision to diversify has helped it tackle the Covid-19 crisis successfully over the past two years and has given it enough reason to expect its hotels to make a profit in 2022.

The company said its aim is to create opportunities and expand its business in line with the “new normal”.

CEO Thitima Rungkwansirirot said the company is using the “3 Game-Changing Deals” to turn the ongoing crisis into growth opportunities.

The first game-changer was becoming the sole shareholder of 26 hotels in Britain that have the potential to revive quickly.

“In the first three months of the company acquiring 100 per cent of a hotel group in the UK, the average daily room rate rose sharply compared to before the pandemic. The company’s hotel business reported earnings before interest, taxes, depreciation, and amortisation in six quarters. The investment in the UK has proved to be good in terms of assets and time conditions,” Thitima said.

She adds that the key to growth is not just “building”, but also keeping the portfolio balanced. The firm has been conducting “asset rotation” to boost profit without additional investment by rotating funds to invest in potential hotels.

Singha Estate is confident that its hotel business will report a full year of profits in 2022 for the first time since 2019 thanks to the easing of travel restrictions in the UK coupled with the full operation of the Crossroads project in the Maldives.

The Crossroads project, called a “new high” for Singha Estate, is Maldives’ only fully-integrated tourist facility, which offers various types of accommodation and is only 15 minutes away from the airport by speed boat. Though there are concerns over the Omicron variant, hotel bookings have been rising.

The project also features The Marina – a township of shops, restaurants and seminar rooms, including an aquatic learning centre. The Crossroads suits a wide range of target groups, from honeymooners to budget travellers, including organising corporate activities and weddings.

The Crossroads project was launched in 2019 and is set to go into full operation in 2022.

The second game-changer was the sale of a low-rise housing development project that Singha Estate used to hold a majority stake in. The sale of this project has “unlocked” the potential to develop and invest further during the pandemic, with a goal to generate an income ratio of 75 per cent of income from low-rise projects and 25 per cent from condominium projects.

The company also plans to expand its business to boost yields for investors, including developing projects that serve an ageing society to cover skilled nursing and rehabilitation personnel. Meanwhile, the real-estate business has been generating an income of more than 4 billion baht yearly from the quality backlog and another 2.8 billion baht from the sale of ready-to-move-in condominiums.

The highlight of 2022 will be the launch of a new housing series, which is expected to be the main source of income in the future. The 3-billion-baht estate will provide single-detached houses priced at between 60 million and 100 million baht. Some units are ready to be transferred for ownership in a bid to recognise revenue within next year.

The third game changer is to penetrate the company’s fourth business, which is an industrial estate and infrastructure – aiming to reach corporate customers while keeping the investment portfolio balanced. Singha Estate began acquiring more than 2,000 rai of land for industrial estates and a 30 per cent stake in three co-generation power plants with a production capacity of 400 megawatts in Ang Thong province.

One power plant has gone into operation, while the other two are set for a commercial operation date by the end of 2022. All three power plants are currently under an electricity-purchase contract with the Electricity Generating Authority of Thailand, which guarantees constant income, while the remaining electricity can be sold to customers in Ang Thong industrial estate.

The Singha Estate’s office-building business has also made interesting developments. The firm’s homegrown brand “Worko” offers a dedicated co-working space, which was sold out a few months after opening. The company will also launch its “S Oasis” office building in mid-2022, which is believed to be the main income source of this business group as there has been a number of clients interested in visiting the project.

Thitima added that the three game-changing deals were created to help the company tackle the pandemic and manage its portfolio properly. She confirmed that Singha Estate is ready to handle the market by strengthening its businesses which include hotel, real estate, office building, industrial estate and infrastructure.