LH Property investing Bt6 bn in retail

"This is a move to increase Land & Houses' rental income in the next three years," LH Property chairman Anant Asavabhokhin said at press conference yesterday.

Rental income will then be 20 per cent of overall revenue.

Anant said the company expected rental revenue from retail business in the project to be about Bt1 billion for the first year of operation, plus Bt600 million from the serviced apartments.

Half of the investment in the project, to be completed in the third quarter of 2012, comes from the company's capital and the rest through Siam Commercial Bank financing.

Land & Houses estimates its revenue may grow 10 per cent to Bt20 billion this year after the company saw strong demand in the third quarter. In the first nine months, revenue reached Bt12 billion.

Anant said the company believed that since the country's political problems were more stable, housing demand had recovered. Sales revenue should therefore exceed the estimate of Bt17 billion-Bt18 billion set earlier this year.

Thanks to the economic recovery, the company has strong confidence in its new investment in the retail and serviced-apartment block, he added.

"We have to invest, as we believe our retail business is different from the general market," he said.

LH Property has appointed Siam Retail Development to manage the project's shopping space of 40,000 square metres. More than 600 shops are expected, both international and local brands.

Meanwhile, the serviced-apartment section's usable space of 35,000 square metres will feature about 400 rooms.

The property is located on 9 rai of land, which is leased for 30 years.

Siam Retail Development director Prasert Sriurapong said the retail rental price could be Bt40,000 per unit of 10-15 square metres per month.

SF Cinema City will rent about 5,000 square metres. Combined with agreements from other retailers, 30 per cent of the retail space has already been taken up.

"We expect 50,000-80,000 visitors a day as the location is close to the BTS Skytrain and MRT underground, which have traffic of about 100,000 people a day," he said.