Thai Rung budgets B1 bn for property
Ten new projects to be developed in the next five years
Thai Rung Union Car has set aside more than Bt1 billion for the development of new property projects in Bangkok and other tourism destinations over the next five years, in line with its long-term strategy of balancing its business portfolio by sharply raising the contribution from real estate.
The listed company, which has operated an auto-parts manufacturing and car-assembly business for nearly 50 years, expects to triple the contribution from property from 10 per cent currently to about 30 per cent during the period.
Thai Rung, which posted Bt600 million in revenue last year, expects flat growth this year due to the slowdown of the domestic auto market, following the expiry of the previous government’s first-car scheme.
Wuttichai Phaoenchoke, managing director of Sinthoranee Property, the company’s real-estate arm that was established seven years ago, said Thai Rung’s portfolio was divided into three key areas: auto-parts manufacturing and auto assembly, which contributes 70 per cent of revenue; authorised dealerships of auto-makers Mitsubishi, Isuzu, Ford, Mazda and Lexus, which accounts for another 20 per cent; and property, which makes up the remainder.
“I’m allocating 70 per cent of my time to the development of property projects,” said 44-yerar-old Wuttichai, who is from the second generation of the Phaoenchoke family, which founded Thai Rung in 1967.
The company’s current development projects are The Trendy office building on Sukhumvit Road Soi 13; the Sawaddi Patong, a four-star, 150-room hotel in Phuket; and The Sea Samui, a 30-room boutique villa hotel on Koh Samui.
“We currently have a land bank of more than 500 rai [80 hectares] in four or five major locations, both in Bangkok and other tourism destinations, such as Samui, Phuket and Pattaya. Such plots can be utilised for potential development projects in the future, especially mixed-used buildings, which combine a community mall and housing units, or a condominium and hotel, for instance,” he said.
Some 10 new projects will be developed in the next five years, ranging from medium-size projects requiring an average investment of about Bt100 million to large-scale projects costing around Bt500 million each.
One such project is the Bt200-million expansion of its Sawaddi Patong property, doubling the number of rooms to 300. This project will be implemented next year, he said.
“We are looking to develop new property projects for sale in the next couple of years, moving from our existing projects, which have been developed mainly for rent or leasing, such as hotels and office buildings,” said the MD.
“We expect the contribution ratio between development projects for sale and those for rent or lease will be equal within five years,” he added.
Meanwhile, Thai Rung will conduct a grand opening of its first community mall – Victoria Gardens on Bangkok’s Phetkasem Road – on November 29.
Occupying a gross retail space of about 14,000 square metres, the mall will comprise 200 tenant shops with major anchors, including Foodland Supermarket, McDonald’s, Starbucks and MK Suki.
With a catchment area of 5 kilometres, the project will take about eight years to provide a return on investment, Wuttichai said, adding that the goal was to attract about 5,000 cars and 10,000 shoppers a day.
