New city plan paves way for revitalised Seacon City project
February 25, 2014 00:00 By Somluck Srimalee
Suspended plan to take shape next year despite jump in cost to Bt15 bn
Seacon Development is planning a mixed-use project, Seacon City, on Srinakarin Road worth Bt15 billion next year, when the new Bangkok City Plan will be in effect.
“We suspended our Bt7-billion Seacon City plan 10 years ago because it was not feasible under the older Bangkok City Plan, which prohibited buildings comprising more than 10,000 square metres of space on Srinakarin Road,” managing director Tatiya Sosothikul told a news conference this weekend.
However, the new city plan announced last year allows construction of a building of that size on Srinakarin. As a result, the company has revitalised its Seacon City project for development next year, although the investment budget has more than doubled to Bt15 billion, he said.
Tatiya said Seacon City would combine condominiums, serviced apartments, an education centre, office buildings, and a sport complex on 120 rai (19.2 hectares) near Seacon Square Srinakarin shopping centre. Construction will start next year after the current study of the revised plan is finalised, and will take seven years to complete.
Half of the investment budget will come from the company’s cash flow, and the rest from bank loans, Tatiya said.
He said the company had also budgeted Bt1.8 billion for renovation and expansion of the retail space at its two shopping centres over the next two years.
Of that total, Bt1.5 billion will be spent to expand Seacon Square Srinakarin retail space by 30,000sqm, with construction to start next year. About Bt200 million will be spent this year on renovation of the Srinakarin shopping complex, and the remaining Bt100 million to renovate the education zone at Seacon Bangkae, also this year.
Currently, Seacon Square Srinakarin has total retail space of 190,000sqm, so after the expansion, the shopping centre will boast 220,000sqm.
Seacon Development targets revenue growth of 5-8 per cent this year.
“We target Seacon Square Srinakarin’s revenue to grow 5.5 per cent this year, while we target growth of 8.9 per cent in revenue from Seacon Bangkae. Renaissance Phuket, a luxury hotel, targets growth of 8.5 per cent,” he said.
Seacon Square Srinakarin recorded revenue of Bt1.38 billion last year, up 5 per cent from 2012, while Seacon Bangkae recorded Bt530 million in 2013, its first year of operation. Renaissance Phuket recorded Bt361 million in revenue last year, up 11 per cent.
Tatiya said total revenue growth would be driven by an average 7-per-cent increase in rental fees for both Seacon Square Srinakarin and Seacon Bangkae.
Meanwhile, the number of tourists in Phuket has also has been rising, so the company believes its luxury hotel on the resort island will generate higher income this year.
At present, Renaissance Phuket has an occupancy rate of about 90 per cent, higher than the same period last year, which saw a rate of about 80 per cent.
Tatiya noted that the political turmoil that has been plaguing Bangkok for months had little effect on the company’s two shopping centres as both are located far from those areas favoured by the anti-government mobs.
“Meanwhile, our luxury hotel has also benefited as many tourists have avoided Bangkok and gone to Phuket,” he said.