Tuesday, July 07, 2020

Singha eyes mixed-use projects overseas

Jun 23. 2019
Naris
Naris
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By   SOMLUCK SRIMALEE
THE NATION

LISTED property firm Singha Estate Plc is studying expansion of investment in Myanmar and Vietnam to develop mixed-use projects including hotels, offices and residences to achieve its goal to be a “Global Holding Company”, the company’s chief executive officer Naris Chheyklin said recently.

“We are negotiating with a Myanmar partner to set up a joint venture firm to develop mixed-used projects. It could be finalised this year or next year, depending on the conditions. We are also looking at possibilities in Vietnam. We believe that within five years we will be developing mixed-use projects in both countries,” he said.

He added that the company has continued to expand investments in the hospitality business in both Thailand and overseas after deciding to separate its hotel business, S Hotel & Resorts Plc, to manage all of its hotel business units. The company has already applied to the Securities and Exchange Commission for listing S Hotel & Resorts Plc on the Stock Exchange of Thailand. It will raise new capital through the issue of 1,437.45 million shares with par value at Bt5 per share.

“We plan to use the funds from the initial public offering to expand our hotel investment. As of now, we have a total of 39 hotels with a combined 4,647 rooms in Thailand, UK, Maldives, New Zealand, Fiji, Mauritius, Samoa, Indonesia, US, and Australia, under the brands Outrigger, and Crossroad. We expect to have 100 hotels around the global with 10,000 rooms by 2024,” he said.

“We cannot say how much will be invested in the hotel business from 2020 to 2024 but on average the investment per room will be US$700,000,” the company’s chief financial officer Thitima Rungkwansiriroj added.

With aggressive investments in the hotel business, the company expects total revenue from hotels will comprise up to 40 per cent of Singha Estate Plc’s total revenue target of Bt20 billion in 2020, he said.

At the end of year 2018, S Hotel and Resorts Plc recorded total revenue of Bt2.5 billion and net profit of Bt450 million.

The company also plans to launch the hotel of the group as a real estate investment trust to raise capital for business expansion, he said. Meanwhile, this year, the company has set aside an investment budget of Bt10 billion for investment in hospitality, office, and residential projects this year.

Up to Bt7 billion of the total Bt10 billion investment budget has already been spent in the first half of this year. The balance Bt3 billion will be invested during the rest of the year with plans to launch its condominium project worth Bt4.5 billion at Lang Suan, Bangkok. The project will be launched in the market in the third quarter of this year.

“If the investment budget exceeds Bt3 billion this year, we also have an extra investment budget of up to Bt7 billion. This will depend on the business opportunity,” he said.

Naris said that this year, its total revenue from residential projects would account for about 70 per cent of total revenue when the residential projects are transferred to customers this year.

The company currently has total backlog of Bt12 billion; nearly Bt6 billion of the total will be booked as total revenue this year, and the rest will booked as revenue next year.

As the company also has inventory for sale worth up to Bt15 billion, they will generate revenue during the rest of this year and the next two years from now, he said.

The company has also invested Bt3.7 billion since early this year to develop its new 50,000-square-metre office building, Oasis, on Vibhawadee-Rangsit Road. This will increase its office building space from 120,000 square metres to 170,000 square metres in 2020. This will be a part of its strategy to generate recurring income for the group in 2020.

“In 2020, up to 50 per cent of our total revenue will come from recurring income from the both hotels and office buildings, and the balance 50 per cent from sale of residential projects,” Naris said.

In the first quarter of 2019, Singha Estate Plc recorded total revenue of Bt3.15 billion and net profit of Bt268.98 million, up 160 per cent and 13 per cent respectively from the same period of last year. The company also expects its total revenue growth in double digits this year compared with last year. At the end of 2018, the company reported total revenue of Bt8.93 billion and net profit of Bt1.28 billion.

 

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