Future Park Rangsit mall expands in view of demand for retail space
Rangsit Plaza Co, owner and operator of Future Park Rangsit, has set aside an investment budget of Bt3 billion to expand the plaza's shopping area by 80,000 square metres on 12 rai (2 hectares) this year.
The project is to support the demand for new retail business from members of the coming Asean Economic Community (AEC), chief executive officer Pimpaka Wanglee told a news conference yesterday.
Half of the investment budget will come from the company’s cash flow, and the rest from an increase in its Future Property Fund from Bt1.5 billion to Bt3 billion, while also extending its period from 15 years to 30 years. This will help the company reduce its debt burden and manage its financing cost better than by borrowing from a commercial bank.
After the company issued the Future Property Fund in 2007, it has yielded dividends to investors averaging 9-10 per cent a year.
The company has appointed BBL Asset Management as its financial adviser and plans to issue the expanded property fund by the end of this year. Pimpaka said the company had planned to expand its shopping space last year but the project had to be delayed because of the flood. However, if there is no more serious flooding, the company will start construction by the last quarter of this year. This will be complete by 2015, the year the AEC takes effect.
“This is a good time to invest, as demand for retail space is rising to benefit from the AEC,” she said.
The company has also budgeted Bt100 million to set up a flood-protection system, planned for completion by September. It had to spend Bt300 million to renovate the plaza after the flood hit last year.
She said an average of 140,000 customers visited the shopping centre each weekday, increasing to 170,000 a day during weekends. And when it holds an event, the number jumps to 200,000-250,000. That is one of the reasons the company has to expand its shopping space. Rangsit Plaza Co targets revenue to grow by 26 per cent this year over 2011 after witnessing 15-per-cent growth in the first half compared with the same period last year.
To drive business growth in the current second half, the company has set aside a marketing budget of Bt200 million for 40 events, Pimpaka said.
