Dutch retail developer plans $90 m investment

Several Indochinese markets now have higher growth potential than that of European countries.

ECC's Thai project will be situated in the northern province of Chiang Mai, where Central Retail Corp (CRC) said yesterday it would delay a project by two years.

CRC also decided to delay another project in Chiang Rai by one year due to economic uncertainty.

However, CRC will invest about Bt3 billion annually in acquisition of overseas retail properties to maintain its revenue momentum, according to its executives.

As for ECC, its chairman and founder Dion LJ Heijmans said shopping malls' revenue in Asia is projected to grow by over 10 per cent per year, compared to growth of just 4 to 5 per cent for the group's Promenada brand in European markets.

"Asia's population has grown at a higher rate than in Europe and people have ambition to work and grow their economy's size. I have an optimistic view on Asia," he said.

Chiang Mai was chosen for the first project in Thailand, after which the company will consider entering the Bangkok market.

The $90-million mall in Chiang Mai will have a total retail space of 75,000 square metres for both rentals and a department store.

It will also feature a street mall, offering a variety of blended brand-name and local products, which target the upper-middle market.

Heijmans said construction of the Promenada - on Chiang Mai's Ban Sahakorn Road - would start by year's end for opening in the last quarter of 2011.

The group is also seeking a proper location in Bangkok with space of at least 100,000 square metres for a two-storey shopping mall.

Other potential locations include Phuket, Hua Hin and Pattaya.

CEO Tjeert Kwant said the company would go ahead with projects in Asia despite the global economic recession, partly because land prices in both Thailand and Vietnam are likely to fall by 10 to 15 per cent and by 30 to 50 per cent, respectively.

Construction-material costs have also dropped from last year's peaks, so now is a proper time to invest, he said.

ECC Group and its Thai partner VGF Design set up ECC International Real Estate last year to invest in the Chiang Mai project.

He said ECC Group had decided not to enter Singapore or Malaysia because the markets were already saturated.

However, the group has also set a separate investment budget of $500 million to build malls in Europe, Morocco and Middle Eastern countries in the future.