HKR International Limited (HKRI), the Hong Kong-based listed firm that owns the Sukhothai Bangkok Hotel, will concentrate on the high-end residential market in Thailand over the next 5-10 years.
Cha: Land purchase strategy is critical
"Our strategy across Asia is very diversified, but we will focus on high-end residences in Thailand," said executive director Benjamin Cha at the official completion ceremony of the Sukhothai Residences, the company's first ultra-luxury condominium in Thailand.
"A part of the reason is because we are still relatively new to this market. We don't have as much experience as the local developers. Residences are an asset class that we are comfortable with."
The Sukhothai Residences are located next to the Sukhothai Bangkok Hotel in Sathon district. The project was designed to harmonise the spirit of the 21-year-old luxury hotel.
The 41-storey condominium consists of 196 units ranging from one-bedroom units of 88 square metres up to penthouses of more than 1,200 sq m.
HKRI says the project offers unique high-quality services under the concept of blending the hotel and residences.
About 70% of units were put on the market in 2008 and were snapped up by global buyers at an average price of 221,000 baht per sq m.
It became the first luxury residential project in Thailand to have units priced at 300,000 baht per sq m.
HKRI has also acquired two pieces of freehold Bangkok land in Sathon Road and Wireless Road through joint ventures with Thai developers. Both will be developed into high-end condominiums.
The company has a 49% interest in both projects.
Two-thirds of HKRI's business is operated in Hong Kong and mainland China, with the rest in other Asian countries including Japan, Thailand and Singapore.
HKRI will follow a cautious policy of risk management.
"Strategy on land purchasing is very critical. We are very careful about market situations and timing, and we prefer to cooperate with local partners like City Realty [the developer owned by Chali Sophonpanich]," Mr Cha said.
In Thailand, land costs make up about 30% of project costs.
"In terms of hedging risk, our strategy is always to buy land in good locations facing main roads," said Mr Cha. "We may pay a little bit more, but we are certain of long-term value."