Building castles in the sky

Building castles in the sky

Frasers Property Holdings is developing two of the largest mixed-use projects in Bangkok

One Bangkok is the largest project we have managed, says Mr Hua Tiong.
One Bangkok is the largest project we have managed, says Mr Hua Tiong.

Frasers Property Holdings (Thailand), owned by billionaire Charoen Sirivadhanabhakdi's youngest son Panote, plans to continue with mixed-use developments after completion of the massive One Bangkok.

Lim Hua Tiong, chief executive of development, said the firm's future development plans include mixed-use projects that could be located outside Bangkok with a horizontal development concept.

"With our experience on One Bangkok, the largest property investment in a single site in Thailand, development of mixed-use projects is an ideal continuation," he said.

Founded in November 2015 with registered capital of 13.5 billion baht, Frasers Property Holdings has managed the development of two mixed-use projects owned by the Sirivadhanabhakdi family on lands leased from the Crown Property Bureau.

The first is The Parq at the Rama IV-Ratchadaphisek intersection in Klong Toey district, with phase one comprising 60,000 square metres of grade-A office space and 12,000 sq m of retail area.

TCC Assets, one of the family's property arms that developed The Parq, invested 8 billion baht in this phase, which was completed in 2020.

The other project is One Bangkok, where phase one with a gross floor area (GFA) of 1.3 million sq m above ground is projected to be completed by the end of 2023.

"Before we start other projects, we will continue with phase two at both The Parq and One Bangkok, with a combined GFA of 600,000 sq m following completion of phase one. These are both large efforts," said Mr Hua Tiong.

CONSTRUCTION CONTINUES

One Bangkok is developed by One Bangkok, a joint venture between TCC Assets and Frasers Property Limited (FPL), a Singaporean-listed investment holding firm owned by the family through TCC Assets and Thai Beverage Plc.

FPL has major investments around the globe, including Thailand, Singapore, Australia, the UK, Germany, the Netherlands, China, Vietnam and Japan.

"We were appointed to manage the development of this project because it is a very complicated mixed-use development. It is also the largest project we have managed," he said.

With registered capital of 5.5 billion baht, One Bangkok was established in April 2017 and started construction on the project the same year.

"We just finished the most difficult part -- substructure work with a total space of 500,000 sq m below ground," said Mr Hua Tiong, also chief executive of One Bangkok.

"Like everyone else, we were affected by Covid-19, but we built the foundation during that time. Even during the lockdown, trucks could go in and out from the site for excavation work, which was mainly done by machines. We were quite lucky that we could work and finished during the pandemic."

One Bangkok is expected have a total GFA of 1.33 million sq m, excluding the basement.

The largest area, accounting for 50% of the total, is grade-A office space spanning five towers.

Roughly 25% of space is for five luxury and lifestyle hotels and residences, with the remainder for shopping areas in four zones and a convention hall called The Forum with a maximum capacity of 10,000 people.

"Mixed use creates different synergies for real estate development," he said.

"In our case, it is unique because most mixed-use projects don't have a convention hall."

ENORMOUS FUTURE

With a commercial GFA of 900,000 sq m, phase one of One Bangkok is estimated to have a net lettable office space of around 300,000 sq m in three towers, scheduled for completion in the fourth quarter of 2023.

Phase two is projected to have a commercial GFA of 430,000 sq m, comprising hotels, residences and office space, said Mr Hua Tiong.

The office space has a lettable area of 200,000 sq m and is slated for two buildings. One of them will be the tallest in the country called The Signature Tower, with a height of 430m, he said.

"There are three challenges for mixed-use development: construction, operation and business," said Mr Hua Tiong. "We are not worried about our half-million sq m in office space because we conducted a thorough study of the Bangkok office market."

He said more than 70% of Bangkok office supply, some 8-10 million sq m, were old buildings where tenants are looking for newer and better quality space to relocate.

Large companies with multiple offices also want to consolidate after the pandemic is restrained, said Mr Hua Tiong, who is also chief executive of Frasers Property Vietnam.

"There will be 2 million sq m of new office supply coming up in the next couple of years. The figure is daunting, but as Frasers and TCC Group are the largest grade-A office landlords, we can analyse the space well," he said.

A quarter of the supply will be built for landlords' own use, said Mr Hua Tiong, such as government offices or financial institutions that are not for lease.

Another 25% will be outside the central business district (CBD) area, he said. Based on the company's experience, it is very hard for big corporations to move outside the CBD as Bangkok traffic is quite challenging.

Mr Hua Tiong said 25% of future supply is still in the planning stage, which could face challenges because of soaring construction costs.

"The remaining 25% of projected supply, most of which is from us, is still manageable," he said.

"If the market reverts to pre-pandemic norms with absorption of about 120,000-150,000 sq m per year, it is reasonable for our future supply of 500,000 sq m to be absorbed."

Another reason One Bangkok's office space will attract demand is the towers are built to meet LEED and WELL Platinum standards, which are green building certificates, said Mr Hua Tiong.

Many large firms, particularly multinational companies, have commitments to sustainability.

"We will be the first in Thailand to have 'LEED certification for neighborhood development' as well as a platinum rating," he said.


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