Small is beautiful

Small is beautiful

Mr Tatchai thought being an architect was a promising career, but he came to prefer project development.
Mr Tatchai thought being an architect was a promising career, but he came to prefer project development.

As a boy, Tatchai Silphiphat had no idea what he wanted to do when he grew up. He was only certain he did not want to end up as a civil servant like his parents, a career that would never make him rich.

Inspired by his father's friends, many of them architects, young Tatchai thought being an architect was a promising career. The number of people working in the field was relatively low during the Thai economic boom in the 1990s.

After he graduated from Kasetsart University with a bachelor's degree in architecture, Mr Tatchai applied to be an architect at property developer Sena Development Plc.

He worked there as a project architect for nearly a year, handling product marketing activities and spying on a competitor's project to compare specifications and prices. He found that being an architect was the perfect job for him.

Mr Tatchai, wife Pancha-aim Vienravee and their one-year-old son, Gavin.

"To become a proficient architect, you need to always think to extend your design ideas," he says.

"While working as an architect, I came to realise that I prefer project development over designing. The architect needs to follow the customer's requirements and strike a balance between beauty and budget. Many competent architects' projects are very beautiful but normally end up over budget."

After deciding that property development was his new passion, Mr Tatchai resigned from Sena Development and entered a master's of business administration programme in entrepreneurship at the University of Akron in Ohio.

He finished his MBA in 2008, the same year the US was beginning to reel from the hamburger, or subprime, crisis. He returned to his home country and looked for a business development job with the top five developers, settling on a position at SET-listed developer Sansiri Plc.

"I want to do business development, such as looking for a plot to develop a property project, but Sansiri mostly focuses on marketing products," says Mr Tatchai, 36, formerly a senior section manager for the marketing department at Sansiri.

He was with Sansiri for six years, overseeing the marketing of many high-rise projects, including Quattro, Via 49, Via Botani and Via 31 in Bangkok, and Baan Nub Kluen, Baan Sansuk and Chelona in Hua Hin, as well as Habito, Sansiri's first community mall.

Mr Tatchai resigned from Sansiri in April 2014 because he thought the time was ripe to start his own venture. The same year, he founded Kan Property Co with registered capital of 5 million baht.

Initially he had planned to develop a residential project on a three-rai plot owned by his grandmother in the Rangsit area with 33 two-storey townhouses priced around 2 million baht a unit.

But the idea was abandoned when, around the same time, a plot on Ram Intra Road where his grandfather ran a gas station and now rented it out had its lease expire.

When he gets a break from the hurly-burly of his projects, Mr Tatchai likes to spend quality time with Gavin.

"This plot is very valuable for me and my family because it was where we grew up," Mr Tatchai says. "We will not sell it, rather we plan to use it."

He says developing property for rent was his first impulse because rent property can generate recurring income for a property company, even during a sluggish economy, which affects property sales more that rentals.

A community mall was the answer, as there were few in the Ram Intra area at that time.

"I prefer going to a community mall rather than a shopping centre," he says, "as I live in the outskirts of Bangkok and hate to drive through traffic congestion just to reach a large mall in the inner city."

He usually visits a community mall near his home in the Ram Intra area three times a week to buy something at a supermarket, have a coffee or a meal, or work out.

"Going to a community mall is more convenient than a shopping centre because it takes less than five minutes to park the car and walk to it," Mr Tatchai says. "To get to a shopping centre, I have to drive up to 20 minutes just to find a parking spot."

He has seen the Ram Intra neighbourhood change since his childhood. It needed a community mall where people living within three to four square kilometres could visit for their daily needs.

Ram Intra Road is also a key thoroughfare serving the northern and eastern zones of the capital, one where Mr Tatchai estimates that more than 250,000 cars pass daily.

When he gets a break from the hurly-burly of his projects, Mr Tatchai likes to spend quality time with Gavin.

Thus began the development of the three-storey Ease Park on a 3.5-rai site of Ram Intra Road KM 4.5 with a total lettable area of 4,800 square metres. Construction started in 2015 and was completed late last year with an investment of 200 million baht. Ease Park opened in February this year, and the occupancy rate is already 80%.

The mall started with 13 stores and four kiosks. Monthly rents range between 300-900 baht per sq m.

"There are a lot of failing community malls in Bangkok," Mr Tatchai says. "I think many of them are in poor locations. Some are not convenient for visitors, as the parking area is too far from the shopping area. Others developed too many lettable areas because of the high land cost."

He says a good community mall should be convenient and easy to walk around. Developers should find a target destination that draws visitors from one point to another through store signs that can be seen from a distance. The location should have access to surrounding communities and offer services like parking, restrooms and security.

"Though I do not have pressure from land costs, development of a community mall is not easy," he says. "I did not know that banks do not provide project loans for community malls, even though we have a land plot as collateral. Moreover, we are a new company with no track record of success."

Mr Tatchai had started to feel stressed because he'd already spent 5 million baht to start piling construction and got a contractor to bid out the project. He decided to sell the family's Rangsit plot where he previously planned a residential project to develop Ease Park, but this was not enough money. He told the contractor to hold off for a few months. He finally managed to get a project loan with the help of his wife's parents, who have a strong connection with a bank.

The construction process was exhausting, he says, as he supervised the work, from choosing the construction materials to inspecting the construction jobs to following up on progress and detecting defects.

Once the mall opened for business, the headaches did not stop, with problems cropping up every day.

Mr Tatchai stands in front of his Ease Park community mall, one of few such places in the Ram Intra area.

"I started the project with only one administrative staff member," Mr Tatchai says. "During construction, I could wake up late at around 8-9am and have some free time to go to a fitness centre before having a meeting in the afternoon and a dinner with my family."

When construction was finished and the project had completed a test run and started operations, he sometimes had to wake up at 6am and walk to the project site in his pyjamas. (His home is behind the project.)

"I got a call because of a broken water main early in the morning right after the mall opened and rushed to cope with the problem," he recalls. Since the mall opened, he has not touched a golf club, which he used to swing a few days a week when he was an employee.

"The work is exhausting but worthwhile," says the eldest grandson of an 85-year-old former inter-provincial passenger bus operator. "My grandfather really loves the project and is very proud of it. He often walks to see it in the morning."

In 2014, Mr Tatchai resigned from Sansiri and founded Kan Property Co.

After Ease Park, Mr Tatchai plans to develop a residential project in the Ram Intra area where his family has a few land banks. A small project on two or three rai where 10-20 units can be developed is feasible for a new developer, he says.

"Large developers are not interested in small project development. They focus on projects sized more than five to 10 rai," says Mr Tatchai, the father of a one-year-old son. "I will not use price, but rather design to compete in the market."

His former boss, Srettha Thavisin, is his role model because Sansiri's president always introduces innovation to the market, staying a step ahead of other developers.

"Mr Srettha loves developing a good product because he believes it can be sold sooner or later, despite a high price," Mr Tatchai says.

"Real estate is not an easy business. It is a labour. You should be involved in every step from the beginning until the project is complete, as you can learn a lot of things. If you have a passion for what you do, you will have a chance at success."

Mr Tatchai likes to create his own property developments with a focus on design.

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