Developer cashes in on Bangkok’s tallest building, sells core parts to King Power

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MahaNakhon Tower in Bangkok (right) © Arno Maierbrugger

Thailand’s luxury property builder Pace Development sold key parts of Bangkok’s tallest skyscraper MahaNakhon Tower to domestic duty free retail company King Power, media was told at a press conference in the Thai capital on April 10.

Under the agreement, Pace Development is selling land, the 154-room Bangkok Edition hotel, the tower’s observation deck, the MahaNakhon Cube retail building, interiors, operating licenses and related contracts to King Power MahaNakhon, a newly established company by Thailand’s largest travel retailer.

The deal is worth around $450 million. According to King Power CEO Aiyawatt Srivaddhanaprabha, under the proposed terms, the 77-storey tower would be renamed King Power MahaNakhon, although this remains a topic for discussion with the remaining owners, particularly investors in the Ritz Carlton Residences which are another substantial part of the skyscraper and are not part of the deal.

Pace Development, which is carrying a high debt burden from the realisation of the MahaNakhon tower and other prime real estate projects, as well as its purchase and expansion of high-end grocer Dean & Deluca in Thailand, Japan and the US, will use the proceeds from the sale to King Power to reduce debt and buy out shares in the MahaNakhon project from investors Goldman Sachs Investment Holdings (Asia), an arm of Goldman Sachs Group Inc., and Apollo Asia Sprint, a unit of Apollo Global Management LLC.

The two US investors will receive $320 million, according to a stock exchange statement released late on April. That is about one-third more than the $235 million they paid just over a year ago – which was basically a much-needed equity injection for overleveraged Pace Development –  and represents a sizeable quick flipping return. It is understood that Pace Development will hand over the shares to King Power to complete the deal with the duty free giant and keep what’s left for it of the project, namely the Dean & DeLuca outlet in the building, the largest in Thailand.

MahaNakhon is located on Narathiwas Road in Bangkok’s Sathorn district and formally declared completed in August 2016. It exceeded the Baiyoke II Tower to become the tallest building in Thailand at a height of 341 meters. However, as of April 2018, access to the main building was still not possible, with the developer stating that the observatory will be opened “soon.”

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Reading Time: 2 minutes

MahaNakhon Tower in Bangkok (right) © Arno Maierbrugger

Thailand’s luxury property builder Pace Development sold key parts of Bangkok’s tallest skyscraper MahaNakhon Tower to domestic duty free retail company King Power, media was told at a press conference in the Thai capital on April 10.

Reading Time: 2 minutes

MahaNakhon Tower in Bangkok (right) © Arno Maierbrugger

Thailand’s luxury property builder Pace Development sold key parts of Bangkok’s tallest skyscraper MahaNakhon Tower to domestic duty free retail company King Power, media was told at a press conference in the Thai capital on April 10.

Under the agreement, Pace Development is selling land, the 154-room Bangkok Edition hotel, the tower’s observation deck, the MahaNakhon Cube retail building, interiors, operating licenses and related contracts to King Power MahaNakhon, a newly established company by Thailand’s largest travel retailer.

The deal is worth around $450 million. According to King Power CEO Aiyawatt Srivaddhanaprabha, under the proposed terms, the 77-storey tower would be renamed King Power MahaNakhon, although this remains a topic for discussion with the remaining owners, particularly investors in the Ritz Carlton Residences which are another substantial part of the skyscraper and are not part of the deal.

Pace Development, which is carrying a high debt burden from the realisation of the MahaNakhon tower and other prime real estate projects, as well as its purchase and expansion of high-end grocer Dean & Deluca in Thailand, Japan and the US, will use the proceeds from the sale to King Power to reduce debt and buy out shares in the MahaNakhon project from investors Goldman Sachs Investment Holdings (Asia), an arm of Goldman Sachs Group Inc., and Apollo Asia Sprint, a unit of Apollo Global Management LLC.

The two US investors will receive $320 million, according to a stock exchange statement released late on April. That is about one-third more than the $235 million they paid just over a year ago – which was basically a much-needed equity injection for overleveraged Pace Development –  and represents a sizeable quick flipping return. It is understood that Pace Development will hand over the shares to King Power to complete the deal with the duty free giant and keep what’s left for it of the project, namely the Dean & DeLuca outlet in the building, the largest in Thailand.

MahaNakhon is located on Narathiwas Road in Bangkok’s Sathorn district and formally declared completed in August 2016. It exceeded the Baiyoke II Tower to become the tallest building in Thailand at a height of 341 meters. However, as of April 2018, access to the main building was still not possible, with the developer stating that the observatory will be opened “soon.”

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