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The project, which comprises luxury condominiums, hotels and retail space in Bangkok's central business district, will cover about 9 rai taken on a long lease in Narathiwas-Ratchanakarin Road, near the Chong Nonsi Skytrain station.

To develop the city's largest pro-ject, Pace Development and IBC have established three companies with |a combined registered capital of Bt4.5 billion, of which Bt2.2 billion is paid up.

The first firm, Pace Project I, will develop a high-end 150-room boutique hotel called The Edition Bangkok. Pace Project II will develop a luxury residence covering 200 units, while Pace Projects III will develop retail space covering 10,000 square metres.

Pace Development chief executive officer Sorapoj Techakraisri said his company would hold a 51-per-cent stake in the three firms, with the rest allocated to IBC.

He said the project needed an investment of Bt14 billion, with |half of provided by both Pace Development and IBC and the rest from a bank loan.

"We are now negotiating with the bank," he said.

Mahanakhon is expected to be the highest building in the City of Angels, even taller than the 305-metre high Baiyoke Tower II, he added.

People who purchase units in the Mahanakhon residence will get to sign a 30-year lease at a price of Bt250,000 per square metre, and will be given the opportunity to renew the lease twice by another 30 years each time, he said.

Pace Development, owned by the Tachakraisri family, who are also the founders of LPN Development, has previously developed Saladaeng Residences on Silom Road.

The Fishman Group is one of Israel's largest and most renown-|ed private investment groups, |while IBC is a publicly listed global real-estate company with assets of US$2.5 billion (Bt86 billion). IBC posted $175 million in revenue last year.

Sorapoj said the Fishman Group had decided to enter Thailand's property market because prices here were four times cheaper than in Singapore and six times lower than those in Hong Kong.

Anat Menipaz-Fishman, man-aging director of the Fishman |Group, said the company had decided to go into business with Pace Development because it had strong shareholder backing, outstanding management skills and a proven track record. She added that Mahanakhon would be its first investment in Asia.

"We want to enter Asia and chose to do so in Thailand because we believe the country has good potential for long-term investment despite its political problems, and is cheaper than other Asian countries," she said.

Sorapoj said Mahanakhon residential units would be managed by Ritz-Carlton Residences, Bangkok, while The Edition Bangkok would be run by the Marriott Group and Ian Schrager.

Pace Development has applied for environment-impact assessment and construction licences, and expect to start building by the third quarter. Construction should be completed in 2012.

IBC chief executive officer Dalit Braun said Mahanakhon would become an enduring symbol of Bangkok.