Beijing Construction Engineering Group International (BCEGI), one of China's largest contractors, will invest US$60 million to acquire a 30% stake in Landmark Holdings, a wholly owned subsidiary of MAI-listed firm Country Group Development Plc (CGD) and co-develop a riverside mixed-use project worth 29 billion baht on Charoen Krung Road.
An artist's conception of Landmark Waterfront, a riverside mixed-use project being developed by CGD on Charoen Krung Road.
CGD chief executive Ben Taechaubol said the funding will be injected this month and used to construct the Landmark Waterfront Project, requiring investment of 13.6 billion baht for construction. BCEGI will become the main contractor of the project.
Landmark Holdings is a holding company investing in the project, due to start construction this month and be completed in 2018.
Last October the Export-Import Bank of China signed an 11.6-billion-baht financial framework agreement with CGD to finance the project.
The luxury project will be located on a 36-rai plot by the Chao Phraya River on Charoen Krung Road where the Fish Marketing Organization was formerly located and 300 other tenants stayed. It will comprise a hotel, a resort with 312 rooms and a 73-storey residential building with 350 units with 75-year rents.
After transferring this project from the Taechaubol family's firm to CGD, CGD's market cap rose to around 9 billion baht. The company will propose a move to the Stock Exchange of Thailand, said Mr Ben.
"Being an SET-listed firm will increase our value as we mainly deal with foreign investors and partners. International stakeholders will recognise us immediately when we are SET-listed," he said.
In the third quarter, CGD plans to set up a real estate investment trust and sell Anchorage Point, a data centre in London worth 1.35 billion baht. The funds will be used for future property acquisition.
"We are a property investment firm, not a typical property developer," he said. "This makes it more difficult, particularly when seeking a property for investment. But the return is higher."
CGD acquired the data centre late last year when a tenant had already rented it with an investment of around 1 billion baht. It expects to have 100 million baht a year from rent, with an internal rate of return at 25%.
The company expects at least 500 million baht in revenue this year as it delivers condo units at Elements Srinakarin's phase one and two worth 350 million baht and 200 million, respectively.
CGD shares closed yesterday on the MAI at 1.30 baht, unchanged, in trade worth 162 million baht.