Central Pattana Plc (CPN), the SET-listed property arm of Central Group, has earmarked 120 billion baht to develop 30 shopping centres in Malaysia, Indonesia and Vietnam over the next 15 years.
The perspective of CentralPlaza i-City Malls Malaysia.
The move is part of plans to become a regional retail developer ahead of two major rivals _ CapitaMalls Asia Ltd in Singapore and SM Prime Holdings Inc in the Philippines.
Wallaya Chirathivat, CPN's senior executive vice-president for business development and construction, said the company will develop 10 shopping complexes in each of the three countries from 2014-28.
Each will cost 4-6 billion baht, depending on size.
The expansion is planned under joint venture schemes, although mergers and acquisitions could be considered.
Funding will come from cash flow, bank loans and property funds.
CPN is interested in these three countries because of their population size and sharp growth in their middle- and high-income consumer segments.
The company will start construction on a CentralPlaza shopping complex in Malaysia next year for a 2016 opening.
It will be part of the i-City cyber centre project in Shah Alam.
"We selected Malaysia for our first regional mall because we believe the retail market there has plenty of room for growth. The country's overall economy is growing, with greater investment particularly in the retail industry," said Ms Wallaya.
"GDP and per capita income are also rising significantly. Malaysia has higher purchasing power than Thailand, with a per capita income that is almost twice as much."
She said Malaysia is on track to achieve developed-country status by 2020.
Malaysia's population was estimated at only 29 million last year, but Malaysians' per capita income stands at 332,800 baht compared with 176,000 baht in Thailand.
Moreover, Aeon is now the only international retail chain with a presence in that country, said Ms Wallaya.
But Aeon has a different retail format and targets mainly middle- and low-income earners, while CPN is eyeing middle- and upper-class customers.
Ms Wallaya said the retail market in Malaysia is about four times bigger than Thailand's, but the modern trade segment is smaller.
"With 33 years' experience in Thailand, CPN will differentiate itself from other shopping malls. Our collaboration with ICP, an affiliate of the Malaysian property developer i-Berhad, will help us to apply its expertise for a perfect fit with Malaysian consumers," she said.
CentralPlaza in Malaysia will be managed under a joint venture called CentralPlaza i-City Malls Malaysia. CPN will own 60% and its Malaysian partner the rest. This first regional mall is expected to create 1,000 jobs.
CPN is looking for partners in the other two countries as well.
Ms Wallaya said Indonesia is attractive due to its large population and stable politics. Most retail operators are local.
At home, CPN will continue to develop two or three new shopping complexes in Thailand each year.
By year-end, it will have 23 shopping complexes including two new CentralFestivals in Chiang Mai and Hat Yai.
CPN expects 15% revenue growth to 23 billion baht this year.
Shares of CPN yesterday closed yesterday on the SET at 37.25 baht, down 1.50 baht, in trade worth 281 million.