SET-listed developer Raimon Land Plc (RML) plans to invest at least 25 billion baht during 2018-22 in residential development, the hospitality business, commercial properties, food and drinks, and the digital sector in its biggest diversification since establishment.
Chief executive Adrian Lee said the diversification to other businesses should help the developer boost revenue from recurring income to 60% of the total over the next 3-5 years.
"Revenue from new ventures will start coming in this year from investment in food and drinks businesses, projected to generate 117 million baht in revenue by the end of this year," Mr Lee said.
Adrian Lee, chief executive of Raimon Land, says the restaurant business in Asia has high potential.
Late last month, Siam Spoon Co, one of Raimon's subsidiaries, signed a joint venture agreement with Bangkok Wooden Spoon Co, the owner of Baan Ying restaurant, which has been in the Thai eatery business for over two decades and operates 12 sites.
The joint venture firm, Baan Ying Pte Ltd, was registered in Singapore with registered capital of S$1.4 million (33.7 million baht), with Raimon holding 51% and Bangkok Wooden Spoon 49%. It aims to expand the Baan Ying brand and others in Asia.
By mid-2018, Baan Ying Pte will have three new restaurants in Singapore with an investment of 100 million baht. It also plans to have six more in Singapore and one in Bangkok.
"The restaurant business in Asia has high potential, as Asian people prefer eating out," Mr Lee said.
By 2020, Raimon aims to have 15 Baan Ying branches in key Asian cities such as Kuala Lumpur, Phnom Penh, Hanoi, Ho Chi Minh City, Shenzhen, Shanghai and Guangzhou, with the aim of generating 1 billion baht in revenue in 2022.
Of the five-year investment budget, more than 10 billion baht will be injected into commercial properties, a rising-star segment. Raimon expects to have at least 100,000 sq m in net lettable area of office spaces within 2022.
In the second quarter this year it will launch pre-leasing at a new office building on Phloenchit Road. The project, which will become the tallest tower in the Phloenchit area, will have a lettable area of 61,000 sq m, being completed in the first quarter of 2021.
With an estimated value of 23.5 billion baht, the office tower will generate 800 million baht in rental income per year, Mr Lee said, adding that Raimon will also expand its hospitality segment, aiming to have 1,000 hotel rooms under its hold within the next five years.
Raimon operates in the upscale hospitality segment under the Klapson brand, which generated 40 million baht in revenue last year. The hospitality business in future will include an expansion of Klapson using four-star hotel chains.
"Property businesses this year will see flat growth, with a decrease in new condo supply being launched as many of developers will focus on clearing inventory," Mr Lee said.
Last year, new condo supply launched in Bangkok totalled 70,000-80,000 units. Of this amount, just 4,000 units were priced above 10 million baht.
With limited supply in this pricing segment, Raimon's residential development business will remain focused on the segment with a plan to launch two new condo projects worth a combined 8.7 billion baht in the third quarter this year.
One of them will be located on Sathon Soi 12 with 203 units worth a total 3.9 billion baht. Unit prices will be more than 250,000 baht per sq m. The other will have 237 units priced over 300,000 baht per sq m, located on Sukhumvit Soi 33, worth a total 4.8 billion baht.
Raimon expects to have 5 billion baht in presales by the end of 2018, up from 4 billion baht last year, which was the highest since 2013, the year JS Oil Pte Ltd, owned by the Lee family, became the major shareholder of Raimon.
Raimon will also invest in digital business, aiming to create an online property platform, for which it expects 10 million users across Southeast Asia annually.
RML shares closed yesterday on the SET at 96 satang, up one satang, in trade worth 9.37 million baht.