“Our target is to reach Bt10 billion in five years,” said CEO Adrian Lee who began the diversification efforts for recurring income in rental properties such as offices, retail, hotel and restaurants.
Another major achievement was he launched The Lofts Silom with immediate success last year when most projects were struggling.
The Lofts Silom is a 37-storey condo project worth Bt 3.2 billion with 268 units.
“We were fortunate to achieve 81 per cent sales to date at an average of Bt240,000 a square metres,” he said of the site that can be accessed from Sathorn or Silom roads.
The company held off new condominiums for about two years to avoid a large build-up of inventory and costs while building cash reserves. Lee said it was a sound position to take as the company is now has a healthy balance sheet while acquiring prime sites for launching new projects several of which will be announced this year.
“In addition, we should be able to reward shareholders with another dividend, even in a difficult operating period last year.”
It will add two new luxury residential condos this year in mid-Sukhumvit near the BTS station at PhromPhong and another on Sathorn Road.
Their combine worth is about Bt 9 billion. Currently it is nearing completion of The Lofts Asoke and plans to achieve transfers by the year’s end.
“Most of the transfers, will probably be booked next year,” he added. That would provide a good income stream from residential sales for the coming years, along with the three condo sites.
“We aim to launch 2-3 condo projects a year from now on.”
Adrian’s largest undertaking will be a large commercial-retail project on Ploenchit Road opposite Central Embassy.
The 6-rai site will have a 60-storey tower with a 111,500 square metres of built up area. It will have 61,000 square metres for office rentals and another 5,000 square metres for retail.
Adrian anticipates a recurring revenue over Bt 720 million a year, achieving Bt 1 billion in revenues within 3-5 years.
The structure is currently being built and scheduled for completion in 2020.
The mega site is on 6-rai, where RML has secured a 30-year lease with Thaniya, the landowners of Thaniya Plaza. They have a 4-year grace period before the lease period begins, to complete construction and fitting out the premises.
“It was a good agreement,” Adrian said in view of limited prime sites in downtown Bangkok that has a considerable demand for services in the middle to upper end scales.
The company expects to wind up its Pattaya projects by this year after four major sites over the last decade.
RML’s focus will now be on urban sites with good potential for growth with a split between housing and offices.
“The Grade A office market is enjoying strong demand. It is true a number of office sites are coming up but we will be the first to open in 2020,” he said. Its location bear Park Ventures and Gaysorn Tower offices allow RML to charge Grade A rental rates.
The occupancy rate of the overall office market is higher than 90 per cent.”
He said the offices and retail outlets in the project can generate recurring income to reduce volatility and stabilise cash flow for the company in the long run.
The total investment of Bt 7.3 billion comprises construction cost of Bt 4 billion and the lease for Bt3.3 billion.
RML has also partnered with Baan Ying Family Group to bring genuine Thai cuisine to Singapore and other overseas markets.
The joint venture will be 51 per cent owned by RML and 49 per cent by the Bann Ying Family group and will be operated out of Singapore.
The group plans to expand across Southeast Asia and China, opening 10-15 outlets by 2020. Target cities beyond Singapore include Kuala Lumpur, Phnom Penh, Hanoi, Ho Chi Minh, Shenzhen, Shanghai and Guangzhou.