PF buys Japanese ski resort

PF buys Japanese ski resort

B3bn to build villas, condominiums

Keen on drawing Asian tourists to Japan, the SET-listed developer Property Perfect Plc (PF) is set to develop the first phase of villas and condominiums at a ski resort in Hokkaido worth 3 billion baht.

Children relax at the landing area of Kiroro Ski Resort in Hokkaido, which Property Perfect just bought along with land and hotels for 770 million baht. Planned villas and condos will cost 1.5 billion each.

As its first international venture, the company invested 770 million baht in the takeover of Kiroro Ski Resort in Hokkaido from Mitsui Fudosan, Japan's top real estate developer under the Mitsui Group.

"We view Japan as a suitable target due to the size and stability of its economy and the cordial ties that have always existed with the Japanese due to their large investments in Thailand," said chief executive officer Chainid Sirimanee, adding that the takeover price was inexpensive.

In addition to a land bank of 292 rai, assets acquired include two hotels, ski infrastructure and a youth dormitory, all of which are in operation.

Mr Chainid said villas and condominiums valued at 1.5 billion baht each will be constructed on 50 rai.

The villas will house 60 units, costing around 30 million baht each, while the condominium will have about 150 units priced at about 10 million baht each.

He said the first stage of development will kick off next year, while revenue from sales is expected to be realised from 2014 onwards. PF projects to break even in 2016.

Meanwhile, the company expects to realise 1.2 billion baht in revenues from the hotels as early as 2013. The net margin for the hotels will be around 5-10%.

The Hotel Piano and the Mountain Hotel house 282 and 140 rooms respectively, and both are in operation.

Company director Sirirat Wongwattana said all the assets acquired are in good shape and can bring in revenue for the company immediately.

Revenue from the sale of the villas and condominiums are expected to be realised starting in 2014, increasing total revenue from investments in Japan to 2 billion baht.

The ski market on Hokkaido island has been growing in the last decade, frequented by not only Japanese tourists but also those from China, South Korea, Hong Kong, Taiwan and Australia.

The island welcomed 600,000 visitors in 2009, with more than 80% hailing from China, Hong Kong, South Korea, and Taiwan and the rest from Southeast Asia and Australia. In 2012, the total number of tourists is expected to reach 800,000.

"Although our main target will be East Asians, we think there's a lot of potential for Southeast Asian tourists to grow as well," said Mr Chainid, adding the company intends to reorient Kiroro Ski Resort to accommodate more international tourists.

The resort is famous for its high-quality snow and ski runs, but it can be used in all four seasons for camping and trekking.

In addition to its investments abroad, the company plans to expand condominium and villa development to Chiang Mai, Phuket and Hua Hin.

"Investing in these new places will reduce our risk and diversify our sources of revenue," said Mr Chainid.

PF shares closed yesterday on the SET at 1.06 baht, down one baht, in trade worth 34.9 million baht.

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