CP Land earmarks Bt20bn for development upto 2017

business September 12, 2013 00:00

By SOMLUCK SRIMALEE
THE NATION

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CP LAND, a property arm of Charoen Pokphand Group, plans to invest more than Bt20 billion until 2017 to develop both residential and commercial properties in Thailand and Asean.



“We plan aggressive investment this year and the next three years after the rise in demand for property, including office, retail, hotel and residential, when the Asean Economic Community becomes effective in 2015,” Sunthorn Arunanondchai, president and chief executive officer, told a press conference yesterday.
Besides condominiums, it sets its sights on hotels, office buildings and retail centres to generate rental income. 
Up to Bt10 billion will be used to develop or take over up to 10 hotels in Bangkok and upcountry during the five-year period. Negotiations are under way and two deals worth Bt3 billion should be revealed this year in major provinces including Chiang Mai, Khon Kaen, Phitsanulok and Hat Yai. 
At least three office buildings will be developed worth a total of Bt1.2 billion from 2013-14. Two will be in the Northeast – Khon Kaen and Nakhon Ratchasima – and one in Phitsanulok.
The company also plans to launch 30 condominium projects next year worth up to Bt10 billion, including mix-used projects combining condos and retail space. 
It is in discussions with a Chinese property firm about establishing a joint venture late this year to expand investment in Thailand and elsewhere in Asean.
CP Land sees the possibility of investing in new offices and hotels in Asean, particularly in Myanmar, Vietnam and Laos. The first could be launched next year. 
“Our strategy is to develop residential projects nationwide in line with growth in demand. We also have land nationwide that will support our expansion in residential and rental-income projects such as offices, hotels and retail centres,” he said. Demand for all types of properties is on the rise. 
The capital-expenditure budget will be funded by the company’s internal cash flow and the proceeds from setting up a property fund this year, which will buy its three office buildings – CP Tower Silom, CP Tower Phayathai and CP Tower Fortune – worth at least Bt10 billion.
“We have enough cash for the expansion, while our debt-to-equity ratio is lower than 0.4. That means there’s enough room to borrow more,” Sunthorn said.