Singha Estate counts on hotels and offices

Singha Estate counts on hotels and offices

2020 revenue forecast at B20bn

SET-listed developer Singha Estate remains confident it can record 20 billion baht in revenue next year, driven by the hospitality business and office sector.

Chief executive Naris Cheyklin said 20 billion baht was the goal the company set five years ago when it acquired Rasa Property Development through a backdoor listing in 2014.

"Key drivers will be hotels and offices as the residential market slows down," he said. "We postponed the launch of a new condo project, Estro Rangnam, to next year as the condo market is unfavourable."

From 2019-23 the company plans to spend a total of 15 billion baht on commercial property projects, including office and retail spaces. One of them is S Oasis, a 36-storey office tower on Vibhavadi Rangsit Road in the Chatuchak area.

Scheduled for completion in three years, the project will have a lettable area of 53,000 square metres worth around 3.7 billion baht.

Last year Singha Estate recorded 3.97 billion baht in revenue from the residential business, 2.57 billion from hospitality and 674 million from commercial properties.

The company targets 50% of revenue from the hotel business by 2025, expecting to double hotel rooms to 8,000 at 80 hotels from 39 hotels worldwide.

To support the new investment, S Hotels & Resorts, its subsidiary, expects to have an IPO in November.

S Hotels will also spend US$25 million (766 million baht) to renovate three hotels under the Outrigger brand. Six Outrigger resorts in four countries were acquired last year.

Last week, the company launched phase one at integrated leisure and entertainment resort Crossroads in the Maldives, the company's largest investment outside Thailand.

Phase one comprised two premium resorts: SAii Lagoon Maldives, part of the Curio Collection by Hilton, and Hard Rock Hotel Maldives.

The company expects to record 500 million baht from the two new hotels this year.

Dirk De Cuyper, chief executive of S Hotels & Resorts, said Crossroads will drive revenue growth next year as the Maldives will open a new runway at an international airport that can support A380s and long-haul flights.

"Tourist arrivals in the Maldives are rising, estimated to reach 1.6 million this year from 1.4 million last year," he said. "About 30% are Chinese, a segment we are not worried about as arrivals continued to grow in the first half."

For residential property development, Mr Naris said Singha Estate had a sales backlog worth 4.4 billion baht from ESSE Asoke and ESSE at Singha Complex, which will be realised in the second half of the year.

S shares closed yesterday on the SET at 3.12 baht, down two satang, in trade worth 15.9 million baht.

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