CENTRAL PATTANA (CPN) has budgeted between Bt12 billion and Bt14 billion for investment in new shopping complexes as well as mergers and acquisitions, including possible overseas expansion to Malaysia, Indonesia, Vietnam and Myanmar.
Naris Cheyklin, senior executive vice president for finance, accounting and risk management of CPN, said that the company still plans to open a shopping mall in Malaysia in 2016 and is negotiating with potential partners for joint investment in developing shopping malls in Indonesia and Vietnam. For Thailand, the company plans to increase its developed retail space by another 30 per cent in the next three years.
“We are following our investment plan continuously to expand our malls into potential overseas markets. We expect to open our first shopping mall in Malaysia in 2016, a delay of about one year from the previous schedule of 2015. We are also discussing with potential partners to develop shopping malls in Vietnam and Indonesia. However, we cannot give any timeframe for the investment in Indonesia and Vietnam,” he said.
“We admit that the development plan for Indonesia has not made much progress. We are also looking for locations and potential land plots in Myanmar, most of which are owned by the government,” Naris added.
Naris said the company had drawn up a three-year plan (2014-2016) to increase the amount of developed retail space at its shopping malls by 30 per cent from 1.2 million square metres to 1.7 million sqm. Three new shopping malls will be opened locally by 2014. Another four malls would be added by 2015, one of them abroad. The company would also open four to five new malls in 2016, together with its first mall in Malaysia.
Naris said CPN would raise funds from its operational cash flow as well as loans granted by financial institutions. The company would be able to tap another Bt10 billion of borrowing, given its debt-to-equity ratio of 0.52 times. The company has a policy to keep the ratio below 1. CPN will next year offer debentures worth about Bt4 billion to mobilise funds for its financial restructuring worth Bt2 billion.
The rest will be allocated to the mall expansions. The company will take its debenture plan to be approved by its board of directors within this year.
The company is also studying a plan to include its office space in prime locations such as Central Changwattana, Rama IX and Bang Na in the CPNCG property fund.
CPN achieved Bt10.7 billion in total revenue in the first six months of this year, up 20.56 per cent compared to the same period last year, when it posted Bt8.8 billion in total revenue.
The company also posted Bt3.08 billion in profit in the first six months of this year, up 37.89 per cent over Bt2.23 billion earned in the same period last year.
CPN is confident it will win the bid for the plot of land housing the old Armed Forces Academies Preparatory School near Lumpini Park.
Naris said the bid should be open within this month.
“We’ll join the bid for the land plot. It will take some time to know the result. All the designs have been submitted, but we |can’t unveil the details for now as we expect some competition,” Naris said.
In addition to CPN, beverage tycoon Charoen Sirivadha-nabhakdi and Land & Houses Plc have also shown interest in joining the bid for this land plot.
“They are interested in developing a mixed-used project on the site, a source close to the deal said.