With the Thai property market expected to continue slowing down, SET-listed developer Raimon Land Plc (RML) wants to diversify more to hotels and in-vitro fertilisation (IVF) ventures, with a combined investment of 5.3 billion baht.
Chief executive Lionel Lee said hotels and IVF are new recurring-income businesses for the company this year after shifting last year to food and beverage through a joint venture with Baan Ying restaurant. Another focus last year was offices, with a building scheduled to start construction this year.
"Diversification [to non-property business] should create a stable recurring income stream," he said. "Luxury property demand depends on the macroeconomic situation as buyers are from around the globe. The market slowdown is forecast for a few years as China and Europe cool off."
The company was in talks with an IVF provider that operates in Singapore and Australia for a joint venture in Thailand as the company sees strong demand from Chinese couples.
"There are around 90 million Chinese couples seeking IVF to have their second child now that the one-child policy has ended," he said. "This amount exceeds the supply IVF companies around the world can provide."
Raimon Land plans to build fertility wellness centres in two locations. One will be a 40-rai plot near Toscana Valley in Khao Yai, Nakhon Ratchasima, where it will spend 100 million baht to buy.
Last week it paid the first instalment of money to purchase this plot from its land owner.
Lee: In talks with an IVF provider
Earmarking an investment of 1.3 billion baht, it will develop a condo, hotel, retreat, restaurant, gym and fertility wellness centre.
The other fertility wellness centre will be on one floor at One City Center (OCC), a new office tower on Phloenchit Road with a lettable area of 65,000 square metres that Raimon Land will start constructing next month.
Scheduled to open in 2022, the company's IVF centre aims to have 2,500 cycles per year, with a capacity of 4,000 cycles per year. Some 70% of target customers will be Chinese, as around 120,000 Chinese couples come to Thailand each year for IVF.
Mr Lee said the company will spend 100 million baht to renovate 70 shops at the four-storey lifestyle community mall Vue to food-inspired hotel rooms. The new concept hotel will be the first of its kind in Thailand.
Vue is located near new luxury mall IconSiam on Charoen Nakhon Road in front of the River, one of Raimon Land's luxury condos completed seven years ago.
The company is looking for a plot on Sukhumvit Road to develop a hotel under the new concept of "work and stay".
It expects revenue from recurring income business to rise to 30% of the total by 2023 and 50% in the next decade from 10% last year.
This year Raimon Land plans to launch two luxury condo projects in the Phaya Thai area and on Sukhumvit Soi 38 worth a combined 11 billion baht. Raimon Land aims to have 5.5 billion baht in presales by the end of the year, up from 5 billion in 2018.
RML shares closed yesterday on the SET at 1.13 baht, down one satang, in trade worth 4.03 million baht.