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COMMERCIAL DEVELOPMENT
PORNNALAT PRACHYAKORN
Central Pattana Plc (CPN), the commercial property arm of the Central Group, is in talks with potential US and European investors to lease out its two-billion-baht hotel in Pattaya.
''We want to lease out the hotel because it is not our core business,'' said Naris Cheyklin, the senior executive vice-president and chief financial officer of CPN, which mainly develops shopping centres.
He said a deal was expected to be completed within next year. If CPN cannot find an investor, it will operate the hotel on its own.
Once the hotel is completed in 2010, CPN may then decide to divest the property to the SET-listed CPN Retail Growth Property Fund.
The hotel is part of the Central Festival Pattaya Beach complex, a 4.2-billion-baht project that includes a shopping centre and a 340-room luxury hotel. The hotel will be managed by Hilton Hotels Corporation.
Recently, the company announced a plan to sell its Central Plaza Pin Klao and Central Plaza Chiang Mai malls to the property fund.
The money raised from the asset sales will be spent on building four existing projects including Central Plaza Chon Buri, Central Plaza Khon Kaen, and Central Plaza Chaeng Watthana. All are being constructed and the Chaeng Watthana site is expected to open in November.
Other shopping centres that might be sold to the fund in the future are Central Plaza Bang Na and Central Plaza Rattanathibet as their rental revenues are becoming mature and growth would slow to 5% annually.
Mr Naris said CPN also planned to develop a community mall worth one billion baht in Bangkok in the last quarter of this year.
The construction cost will come from the company's investment budget of 18 billion baht in total. It will be spent from this year until 2010.
The project size would be larger than J Avenue and La Villa, housing a supermarket and retail shops. Other details have yet to be disclosed.
In the first half of this year, CPN recorded a net profit of 1.137 billion baht, up 34% from 851 million in the same period last year, on revenue totalling 4.223 billion baht, up 12%.
The rise in profit and revenue was mainly due to high rental rates at all properties and higher occupancy at Central Plaza Rarm Intra and Central Plaza Rattanathibet after their renovations.
Shares of CPN closed yesterday on the Stock Exchange of Thailand at 20.10 baht, down 30 satang, in trade worth 22.69 million baht.
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