Thailand’s Pace Development to raise new funds

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MahaNakhon Tower in Bangkok
MahaNakhon CUBE in Bangkok

Thai property firm Pace Development, the builder of Thailand’s tallest tower MahaNakhon, has said it plans to raise funds through the issuance of a debenture and property fund worth 4.5 billion baht ($136 million) over the next two years as it looks to develop luxury residential projects in Hua Hin and Bangkok, The Nation reported.

The company’s chief executive officer Sorapoj Techakraisri said that the company would issue a property fund, or real estate investment trust, worth 1.5 billion baht by selling its retail business, MahaNakhon CUBE. He said MahaNakhon CUBE was already completed and would open in the second half of the year, with its occupancy rate at 95 per cent and its total retail space 5,200 square meters.

The company will issue debentures worth 1.5 billion baht in the second quarter, with the next 1.5 billion baht worth of debentures issued in 2015.

“We plan to raise funds to develop our two new residential projects, which will be launched in the second half of this year,” Sorapoj said.

“MahaSamutr, worth 3.2 billion baht, and our new project on Lang Suan Road worth 6 billion baht.”

Sorapoj said the projects would generate income for the company in 2015 and 2016. The company has set aside an investment budget of between Bt2 billion and 3 billion baht to buy undeveloped land to develop luxury residential projects in 2015 and 2016.

He added that on average the company planned to launch one or two luxury residential projects worth about 10 billion baht in total each year. They would generate income for the company in the long term after its mix-used 19-billion baht project MahaNakhon was completed in 2015.

MahaNakhon is being constructed in combination with MahaNakhon CUBE and will boast luxury condominiums at its Ritz-Carton Residences. It will also feature a luxury hotel, Bangkok Edition. The transfer to customers is slated for the end of 2015. The Ritz-Carton Residences recorded presales worth 7 billion baht as of the end of February 2014, or about 60 per cent of the total value.

Pace is targeting 70 per cent presales by end of the year. The company is headed for a net loss this year after targeting total revenue of 200 million baht. Last year it had total revenue of 345 million baht for a net loss of 795.37 million baht, with its debt-to-equity ratio 0.8:1. However, Sorapoj said that the company would record net profit in 2015, when Ritz-Carton Residences was due to be completed.

Sorapoj said that demand for luxury units was showing strong growth despite the economy slowing due to the political uncertainty, with demand particularly buoyant among foreign buyers who were expanding their investments in the region in anticipation for the ASEAN Economic Community coming into effect in 2015.

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Reading Time: 2 minutes

MahaNakhon CUBE in Bangkok

Thai property firm Pace Development, the builder of Thailand’s tallest tower MahaNakhon, has said it plans to raise funds through the issuance of a debenture and property fund worth 4.5 billion baht ($136 million) over the next two years as it looks to develop luxury residential projects in Hua Hin and Bangkok, The Nation reported.

Reading Time: 2 minutes

MahaNakhon Tower in Bangkok
MahaNakhon CUBE in Bangkok

Thai property firm Pace Development, the builder of Thailand’s tallest tower MahaNakhon, has said it plans to raise funds through the issuance of a debenture and property fund worth 4.5 billion baht ($136 million) over the next two years as it looks to develop luxury residential projects in Hua Hin and Bangkok, The Nation reported.

The company’s chief executive officer Sorapoj Techakraisri said that the company would issue a property fund, or real estate investment trust, worth 1.5 billion baht by selling its retail business, MahaNakhon CUBE. He said MahaNakhon CUBE was already completed and would open in the second half of the year, with its occupancy rate at 95 per cent and its total retail space 5,200 square meters.

The company will issue debentures worth 1.5 billion baht in the second quarter, with the next 1.5 billion baht worth of debentures issued in 2015.

“We plan to raise funds to develop our two new residential projects, which will be launched in the second half of this year,” Sorapoj said.

“MahaSamutr, worth 3.2 billion baht, and our new project on Lang Suan Road worth 6 billion baht.”

Sorapoj said the projects would generate income for the company in 2015 and 2016. The company has set aside an investment budget of between Bt2 billion and 3 billion baht to buy undeveloped land to develop luxury residential projects in 2015 and 2016.

He added that on average the company planned to launch one or two luxury residential projects worth about 10 billion baht in total each year. They would generate income for the company in the long term after its mix-used 19-billion baht project MahaNakhon was completed in 2015.

MahaNakhon is being constructed in combination with MahaNakhon CUBE and will boast luxury condominiums at its Ritz-Carton Residences. It will also feature a luxury hotel, Bangkok Edition. The transfer to customers is slated for the end of 2015. The Ritz-Carton Residences recorded presales worth 7 billion baht as of the end of February 2014, or about 60 per cent of the total value.

Pace is targeting 70 per cent presales by end of the year. The company is headed for a net loss this year after targeting total revenue of 200 million baht. Last year it had total revenue of 345 million baht for a net loss of 795.37 million baht, with its debt-to-equity ratio 0.8:1. However, Sorapoj said that the company would record net profit in 2015, when Ritz-Carton Residences was due to be completed.

Sorapoj said that demand for luxury units was showing strong growth despite the economy slowing due to the political uncertainty, with demand particularly buoyant among foreign buyers who were expanding their investments in the region in anticipation for the ASEAN Economic Community coming into effect in 2015.

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