Raimon ready to diversify from solid luxury base
Raimon Land Plc (RML) was listed on the Stock Exchange of Thailand in 1994. Under a new management team since 2002, the company has established a sound track record of successful property development both in Bangkok and the main resort locations of Thailand. CEO Johnson Tan discusses the company's strategy and outlook.
The property market in Thailand is dynamic, says Mr Tan.
What is Raimon Land's business model?
Raimon Land is currently a property real estate developer focused primarily on the luxury market segment in major urban and resort locations in Thailand. We are currently exploring new revenue streams outside pure property development that will diversify our core business.
In the first quarter of 2013, there was a major change in Raimon Land's shareholders with JS Asset replacing IFA Hotels & Resorts. Why has JS Asset decided to acquire shares in Raimon Land?
Within Southeast Asia, there are a few opportunities that present the combination of the possibility to invest and participate in a growing market such as Thailand and the strong platform that Raimon Land offers. JS Asset thus viewed as attractive the value offered and the opportunity from which to build the business further. An example of the potential synergies with JS Asset is the Klapsons Boutique Hotel, which was recently awarded Singapore's Best Boutique Hotel in 2012. With Klapsons we are looking at managing serviced apartment units at The River in Bangkok.
How are Raimon Land's current projects progressing?
Zire Wongamat will be topped off within this year and is 85% sold. We expect the project to be completed in 2014. The Unixx South Pattaya project is 50% sold and the foundation work is already completed. In Bangkok, 185 Rajadamri is 85% sold with construction 80% completed, and finally The River is completed with only 10% of the units left to be sold. We are currently in the process of transferring all sold units.
What future projects does Raimon Land have planned?
The Lofts Ekamai, launched on June 8, is a 28-floor project with 263 units. Its design is world-class and units have double-volume heights of 5.9-metre ceilings. The location and design fit exceptionally well together, offering our customers an urban, hip, Manhattan-style loft. We have already seen strong interest in the project as it is 45% sold and the buyers are below the usual age group of Raimon Land customers.
What differentiates Raimon Land from its competitors?
Raimon Land's core projects are typically freehold, high-end luxury condominiums in Thailand. The key difference is in mindset as we think "luxury" from the onset throughout the entire development of a project. We also maintain a lot of our services inhouse including our sales team, which importantly allows us to fully understand our customers' expectations and needs, and our research team, giving us very strong industry knowledge and understanding of the potential market developments. The result of this mindset has been proven by our performance and with our continued development of Raimon Land customers.
How do you view the property market in Thailand?
The property market in Thailand is dynamic and this is due to Thailand's strengths as a country with quality private health care, great food and hospitality, and the airport having more connecting flights than Singapore, for example. We foresee continued growth within the property market here, and with the upcoming changes in terms of REITs (real estate investment trusts) being allowed, we expect the property landscape will morph as a result.
What are the biggest risks facing your business today?
Raimon Land is not a property developer that launches a new project every month. We are continuously searching for the next iconic project, asset, and location as we have to ensure the viability and successful outcome of any project that we launch in the future. Financially, we ensure that our cash flows remain strong with our higher deposit requirements versus the market, and also because we want to ensure that the buyers of Raimon Land projects are genuine and not speculators.
Where do you expect to see Raimon Land in five years from now?
There is only so much prime real estate that is freehold in Bangkok available today and we are exploring opportunities and new revenue streams outside of pure property development. Raimon Land will evolve into more of a real estate company and not a pure developer, though it will continue to be one and grow as a brand that people associate with quality and luxury. We have a demanding clientele and are used to delivering as per their expectations, and thus over the next five years we will let the performance of the company speak for itself.
The Executive Q&A Series is presented by ShareInvestor, Asia's leading financial internet media and technology company and the largest investor relations network in the region, with more than 400 listed clients. This interview was conducted by ShareInvestor. For more information, email firstname.lastname@example.org or visit http://www.thailistedcompany.com