Property Perfect diversifies into community malls

The move is in line with Bangkok’s rail-system expansion, and will serve the growing population in the capital and its suburbs, especially when the Asean Economic Community (AEC) becomes effective in 2015.
The company’s investment budget will come from an increase in registered capital from Bt800 million to Bt1.35 billion next month, bank borrowings and the issuance of a property fund in 2015, Property Perfect CEO Chainid Ngowsirimanee said yesterday.
We Retail will maintain its debt-to-equity ratio at not more than 1.5:1 times following the capital increase, he said.
Two of the four community-mall projects, worth Bt1.5 billion, will commence construction during the next quarter, with operations scheduled to begin in the final quarter of next year.
Metro West Town, located at Kalapapruk, will have 10,458 square metres of retail space on a 10.45-rai plot, and Metro East Town, located at Sukhumvit 77-Lat Krabang, will comprise retail space of 10,255 square metres on 16.5 rai.
Both projects will be funded by capital-increase proceeds and project finance from commercial banks.
One of the remaining two projects will be situated on Ram-Indra, with retail space of 150,000 square metres and an investment cost of Bt6 billion, while the other – costing Bt12 billion and located on Ratchadaphisek – will have combined retail space of 300,000 square metres.
Construction of these two malls will commence next year, with completion scheduled for 2015. Project finance will come from the increase in registered capital, the new property fund and bank borrowings.
“We Retail plans to apply to become a listed company in the Stock Exchange of Thailand in 2015, when it will increase capital again,” he said.
Chainid said the company had decided to expand its business from developing residential projects to retail development after seeing growing demand for retail space following a continued rise in the population of greater Bangkok, especially when the AEC comes into effect in 2015.
Moreover, infrastructure expansion – especially new rail routes – will improve links between Bangkok and the suburbs.
This will open up new locations for retail development so that all communities can be served, he added.
Property Perfect, a listed company, targets rental income from We Retail averaging Bt200 million a year when the first two projects are completed next year.
Meanwhile, the company plans to sell both Metro East Town and Metro West Town to a property fund worth between Bt1.5 billion and Bt2 billion in 2015, said the chief executive.
Chainid said the company had also appointed the experienced ThinkWork to manage its retail business. ThinkWork will be its partner for the management of all its retail branches around the country.
ThinkWork’s founder, Somkit Tantadvanichkul, said both Metro East Town and Metro West Town already had retail-space bookings of 70 per cent. The target is to achieve 95-per-cent occupancy by the time two community malls open.
Monthly rents are between Bt1,000 and Bt1,500 per square metre, and 5,000-10,000 shoppers a day are targeted at each mall per day.
”We believe the targeted number of shoppers is achievable because both projects are located close to Property Perfect’s residential projects, where more than 2,000 units have already been transferred to customers.
“These will be the main customer target for both projects,” Somkit said.