By The Nation
However, the company has revised down its 2020 revenue target by 50 per cent but expects its business to recover in the fourth quarter of this year.
Singha Estate will concentrate on developing a new business model under the “New Living & Working Cluster” concept in potential locations to serve changing consumer demand and investment in the “new normal” era, and developing smart merger and acquisition to build portfolio for sustainable growth, said Naris Cheyklin, chief executive officer.
“The company hopes the Covid-19 crisis will eventually end soon. We see many business opportunities and potential investments arising along with the economic improvement. We will consider investment suitability under the strict M&A criteria to have quality asset that will create added value in the future,” he said.
“Therefore, we will keep building our three core business units as long term planned. For the residential and commercial businesses, we will penetrate new locations and develop quality projects under the “New Living & Working Cluster” Business model concept to respond to the New Normal trend, while the hospitality business will generate additional incomes and grows business sustainably with Smart M&A and Asset Light Model."
"With these business practices, we aim to recover and will also support our business partners to overcome the crisis together.”
During the Covid-19 crisis, the company has managed to maintain a low net interest debt-to-equity ratio of 0.86 times.
This came after the listing of S Hotels & Resorts Plc (SHR) on the Stock Exchange of Thailand late last year, and the sale of Suntowers’ 30-year lease rights into S Prime Growth Leasehold Real Estate Investment Trust (SPRIME REIT), enabling the company to invest and expand as expected.
Meanwhile, the company said it plans to strengthen its financial position by transferring rights of Metropolis Building and Sun Plaza into REIT and issuing bonds when the market is favourable.
Singha Estate said it has an inventory of residential units valued at about Bt1-2 billion baht, and can therefore implement a sales policy to maintain a good profit margin for its projects.
In the second half of this year, the Bt6.5-billion ESSE Sukhumvit 36, with sales at 60 per cent, will be completed for ownership transfer to customers in the third quarter, it added.
Three or four new low-rise residential projects will also be launched, said the company. For the next four years, the target to launch five to seven new projects per year will be maintained, it said.
For the commercial business, Singha Estate has kept its target to grow its total office space to 300,000 square metres over the next five years, upgrading hygiene standards with touchless solutions and UV air-conditioning. It will reach out new potential tenants such as those in the high-growth sectors of e-commerce, technology, and consumer products.
For the hospitality business, the company through S Hotels and Resorts (SHR) has plans to acquire hotels in Asia Pacific and expand the hotel portfolio to 80 hotels over the next five years from 39 hotels currently.
It will also pursue the Asset Light Model by generating additional income through home grown brands, including a new brand expected to launch soon. The programme will commence late this year or in 2021. SHR has already launched SAii, its first home-grown hotel brand, with a flagship opening in CROSSROADS Maldives.
SHR expects tourism to recover progressively this year in Thailand after being hit hard by the pandemic.
Meanwhile the company sees opportunities to develop residential projects in new potential areas along the expansion of mass transit systems and road networks. The low-rise projects with mix-used concept including single house, townhouse, retail, and low-rise office as well as wellness residential project will be emerging opportunities.
For office space, Singha Estate said it will focus on the “Work Space Solution” concept – flexible space solutions in different locations including large building, medium-sized building, or low-rise building as well as co-working space in new locations, all with IT systems. The company plans to launch the workspace concept at Sun Towers late this year.