Ticon Industrial Connection Plc (TICON), a SET-listed developer of ready-built factories and warehouses, is set to review its revenue estimates for 2014 but said business outlook is improving as stability returns.
Mr Virapan says investment sentiment is improving as stability returns.
Managing director Virapan Pulges said investment sentiment has been improving as potential customers are coming for site visits this month.
"There were visit cancellations by overseas customers in the first half of the year due to the political turmoils but not any more. There was also initial concerns after the coup late May but the situation has become clearer," he told the Bangkok Post.
Around 80% of Ticon clients are Japanese companies and international small and medium-sized enterprises (SMEs) that are part of the supply chains. Automotive industry represent 35% of Ticon's business followed by electronics industry at 31%, so the end of the Yingluck Shinawatra-government's first-time car buyer scheme means Ticon's land sales were affected too.
"The slowdown in the first half of the year came from factors not limited to the political conflicts but also decline of car sales. It doesn’t matter whether there are political conflicts going on. As long as their sales continue to grow companies will continue to expand. Also many projects have already been planned and are part of their cost-saving so they are unlikely to stop," said Mr Virapan.
The company has recently revised down the target of factory rental space this year from 100,000 square metres to 70,000 as demand in the first half was weaker than previous estimates. Mr Virapan said that prompted Ticon to downgrade its revenue forecast for the year but he declined to give specific figures.
"Especially when the economy is not good, renting is crucial to help companies save costs including logistics," he said.
In October, Ticon will create a real estate investment trust (REIT) to raise 5 billion baht with Bualuang Asset Management acting as a trustee. Ticon’s REIT will be similar to its TFUND, a mutual fund that invests in real estate assets, mainly factories, in Thailand.
Ticon also plans to expand its warehouse and distribution business beyond Bangkok and the Eastern Seaboard to tap into potential growth in other provinces through its subsidiary Ticon Logistics Park (Tpark).
"The Thai economy has largely been generated in Bangkok and its vicinity. While the potential of other areas remains unrealised, the same amount of money can have a larger impact there." said Mr Virapan.
Tpark will open warehouses in Khon Kaen next year, followed by Surat Thani and then Lumphun.
Patan Somburanasin, managing director of Tpark, said the company plans to expand its build-to-suit warehouse business overseas as recommended by clients planning to expand.
"A build-to-suit has less risk associated with it because it is built to the client’s specifications and incoming revenue is known beforehand. A ready-build factory is riskier because local conditions are different to Thailand's, such as basic infrastructure network, which need to be carefully studied,” he said.
TICON is also looking at Myanmar and Vietnam for potential expansion. Indonesia is also a potential market although it is still
"But that is also come with challenges such as local competitions, rules and regulations, and land prices especially in Myanmar," Mr Patan.
Shares of TICON closed on the SET on Friday at 17.70 baht, down 60 satang, in trade worth 204 million baht.