Three giant conglomerates ready to pour funds into sector

The funds have been earmarked for both residential projects as well as commercial buildings to generate long-term income.
With a high net-profit margin in the property sector, which has recorded average earnings of 15 per cent, big Thai conglomerate have decided to aggressively pour money into the industry.
TCC Land Group, which is owned by Charoen Sirivadhanabhakdi, has been investing in hospitality and commercial buildings such as office and retail projects under its non-listed firm TCC Land Asset World Co Ltd. Charoen’s daughter Wallapa and her husband Soamapat Traisorat are managing the subsidiary. The company has said that it will spend Bt74.2 billion on developing at least 10 new hotels from now until 2022.
“TCC Land plans to invest aggressively in the hospitality business as it foresees Thailand becoming a regional travel hub now that the Asean Economic Community has gone into effect, especially in terms of meetings, incentives, conferences and exhibitions [MICE]. For now, we are suspending expansion in the residential market and will spend less in retail properties due to limited availability of land,” Soamapat, who is chief executive officer of TCC Land Asset World Co Ltd, said.
Its Singapore-based arm Frasers Centrepoint Ltd (FCL) will oversee the company’s future investments in hospitality business overseas.
“We have continued managing some of our overseas hotels in places like Vietnam, Laos, Cambodia and China. But the new investments abroad will now be expanded by our subsidiary in Singapore,” Wallapa, TCC Land Asset World Co Ltd’s deputy CEO, said.
Meanwhile, Charoen’s son Thapana Sirivadhanabhakdi also holds a majority stake in listed property firm Univentures Plc, which also plans to invest more than Bt10 billion on residential projects through its subsidiaries Golden Land Property Development Plc and non-listed firm Grand Unity Development Co Ltd.
Univentures Plc, a holding company of TCC Land Group managed by Thapana Sirivadhanabhakdi, has also been investing on commercial buildings that generate long-term rental income.
“We are a holding company, but we also have the potential to invest when we see an opportunity,” Univentures’ president Worawat Srisa-an said.
Univentures is aiming to achieve total revenue of Bt15.3 billion by the end of this year, or 15 per cent higher than last year’s Bt13.4 billion.

Singha eyes overseas market
Meanwhile, Singha Estate Plc, which is part of the Singha Corporation Group owned by the Bhirombhakdi family, is not just expanding its investment domestically but is also eyeing markets overseas. It has set aside Bt20 billion to develop residential projects and acquire another hotel chain in the United Kingdom. Last year it spent Bt8.8 billion to acquire a 50-per-cent stake in the FICO group, which operates 26 Mercure hotels in the UK.
“Other than England, we are also looking for potential acquisition deals of hotels in Germany and Spain,” Singha Estate’s chief executive officer Naris Cheyklin said.
About 80 per cent of the budget will be spent on six or seven joint-ventures and acquisition deals in various property and related businesses here and abroad.
They include hotels, industrial estates, logistics, warehouses and shopping malls.
The company is also looking at businesses, especially hotels and logistics companies, in Cambodia, Laos, Myanmar and Vietnam, with the focus on Myanmar and Vietnam.
The timeframe is two to three years.
In Thailand, the company will this year sign many JV and acquisition deals, including two industrial estates, one warehouse and two shopping malls.
The expansion is in line with the company’s five-year plan to boost annual revenue to Bt30 billion by 2020 from the Bt7 billion projected for this year.
 
CP focuses on provinces and luxury
CP Group, owned by Dhanin Chearavanont, is also planning to expand its investment in both residential and commercial projects via its two firms CP Land Plc and Magnolia Quality Development Corporation Ltd. The focus will be on both middle and upper-income markets.
CP Land has set aside Bt12.1 billion this year to develop both residential and commercial buildings such as hotels, warehouses, offices, logistics centres and industrial estates in Bangkok and 33 provinces.
The company also is looking to go international by expanding across Asean, Europe and Australia, the company’s president and chief executive officer Sunthorn Arunanonchai said.
Meanwhile, Magnolia Quality Development Corporation is focusing on developing luxury condominiums in central business districts. The company, in partnership with Siam Piwat Co, will develop Iconsiam – a Bt50-billion luxury mixed-use project on Charoen Nakhon Road.

Change in strategy
In response to these aggressive investment moves, most other top property firms will have to change their business strategy to compete.
Pruksa Real Estate Plc is one such developer who has decided to branch out from residential projects to businesses that generate recurring income such as hospitality, retail, office etc. This is part of its move to boost its total revenue to Bt100 billion by 2020.
Property Perfect Plc also acquired a major stake in Grand Asset Hotels and Property Plc last year in order to boost its recurring income by up to 20 per cent in the next five years from now.
“We have to change our business strategy to complete with the big conglomerates,” Property Perfect Plc’s CEO Chainid Adhyanasakul said.