Sermsuk opens bidding on 10-rai riverfront plot

Sermsuk opens bidding on 10-rai riverfront plot

Sermsuk Plc (SSC), bottler of the Est soft drink brand owned by liquor tycoon Charoen Sirivadhanabhakdi, has opened bidding for its riverside 10-rai plot on Charoen Nakhon Road with a starting price of 1.55 billion baht.

The 10-rai plot is located on Charoen Nakhon Road and is used as a distribution centre for Sermsuk’s drinks business. This view is from Charoen Krung Road or the Sathon side. The sales agent Colliers envisions the property could accommodate a luxury condo.

The bidding process aims for transparency in selling the property of SSC, a SET-listed firm, shortly after listed developer Golden Land Property Development Plc, owned by Mr Charoen's sons Panot and Thapana, was called in April by the Securities and Exchange Commission to clarify the sale of a 31-rai plot on Ramkhamhaeng Soi 28 to Sirisub Patthana Co, also owned by Mr Charoen's sons.

Mr Charoen is expected to be interested in SSC's riverside plot due to his penchant for collecting land plots nationwide, particularly in prime locations.

SSC reported to the Stock Exchange of Thailand yesterday its board of directors approved a sale via public auction for a plot on the bank of the Chao Phraya River used as a distribution centre for its drinks business.

Colliers International Thailand has been appointed as the sole agent.

Nukarn Suwatikul, Colliers' associate director for investment services, said the plot with a 58-metre riverfront is located in the brown zone of the city plan, a high-density residential zone.

The floor-to-area ratio is 6:1, allowing a total gross area of up to 96,000 square metres, or enough for a 70-storey building. The highest potential for the plot would be a luxury condo for sale, with an initial return rate of 20-30%. The unit price per sq m would be at least 280,000 baht.

Ms Nukarn said bidding is suitable for the plot as it is in a prime location. The seller should receive the best price and time for sale is controllable.

In 2010, Colliers was the sole agent for bids on a plot on Asok Road where the former Japanese embassy was located. It sold to Singha Corporation for 520,000 baht per sq wah, much higher than market prices of 300,000 to 350,000 baht per sq w.

The bidding fee is 20,000 baht, refundable on the condition the bidder submits a qualifying bid.

The registration period is July 2 to Sept 18, 2014 for bid submissions on Sept 19.

Land will be transferred to the buyer in the fourth quarter.

The most recent transaction on Charoen Nakhon Road was a 10-rai plot opposite a riverside 40-rai plot where the new luxury retail centre Iconsiam will be located. It was bought earlier this year by a joint venture between Siam Piwat, Charoen Pokphand Group and Magnolia Quality Development Corporation (MQDC), the developer of Iconsiam.

The sale price was reportedly around 450,000 baht per sq w, but the plot does not have a riverfront.

The venture acquired the 40-rai plot in 2011 for 260,000 baht per sq w.

Tipaporn Chearavanont, chief executive of luxury residential developer MQDC, said the joint venture will invest 12 billion baht to develop Magnolias Waterfront Residences comprising two luxury condos on the same plot as Iconsiam.

The first building with 70 storeys is scheduled to be launched this month, comprising 300 freehold units sized from 60-300 sq m.

Another building is planned for the next phase with 40 storeys and over 100 units. All units will have a river view.

"We will consider whether to use a hotel brand in this residential project," said Mrs Tipaporn.

MQDC and CP Group announced a joint venture with Greenland Group in April, which is one of China's largest property developers.

They plan to develop a luxury project in Thailand, but not this riverside project, said Mrs Tipaporn.

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