Singha Estate to allocate B11bn to projects this year

Singha Estate to allocate B11bn to projects this year

A night view of Crossroads resort in the Maldives. The resort recorded an average daily rate of $418 in the fourth quarter last year.
A night view of Crossroads resort in the Maldives. The resort recorded an average daily rate of $418 in the fourth quarter last year.

SET-listed property company Singha Estate is planning to invest 11 billion baht in new and existing projects this year, aiming for 73% growth in revenue once global tourism recovers.

Chief financial officer Chairath Sivapornpan said 4 billion baht will be earmarked for new plots of land for low-rise housing projects, focusing on the upper-end segment. The company targets net profit growth of at least 10%.

"We will launch three new projects this year, all low-rise houses," he said. "For the condo business, we will focus on existing projects and wait for foreign tourists to return in the second half this year to boost sales."

One of the new projects is located on Phatthanakan Soi 32, comprising 32 single detached houses priced between 50-100 million baht a unit, and four units of home offices priced 20 million baht each. The total sales value is 2.8 billion baht.

On Feb 28, Singha reported it would purchase a nearly 13-rai plot on Sukhumvit Soi 44 in Si Racha district, Chon Buri, for 275 million baht from a company owned by its major shareholder Santi Bhirombhakdi.

"The plot has potential for a residential project as there will be housing demand from Eastern Economic Corridor development and a foreign investment in eastern Thailand," Mr Chairath said.

Of the 2022 investment, 1.5 billion baht is for the hotel business to strengthen profitability, 1.5 billion for industrial estates, 1 billion to continue construction of S Oasis, and 2 billion for other existing projects, he said.

S Oasis is a newly built office tower in the Chatuchak area with a lettable area of 54,100 square metres slated to open in the second quarter of 2022. The company expects an occupancy rate of 60% by year-end.

In the third quarter, Singha Estate plans to dispose of two office buildings: Singha Complex on Asok Road and Metropolis near Sukhumvit Soi 41, and retail space at Sun Tower in the Chatuchak area.

The plan is to sell to S Prime Growth Leasehold Real Estate Investment Trust.

With a total lettable area of over 64,000 sq m, the lease agreement would be valued at 6.45 billion baht, said Mr Chairath.

He said the company aims for 13.4 billion baht in total revenue by the end of 2022, growth of 73% from 2021.

The key driver will be the hotel business, which should account for 63% of total revenue, up from 58% in 2021, said Mr Chairath.

The company said its hotels in five countries have recovered since the second half of 2021 and the momentum should continue this year.

As of Jan 1, 2022, 36 of its 38 hotels have opened.

In the UK, the average daily rent (ADR) in the fourth quarter of last year was 20% higher than pre-pandemic levels.

In the Maldives, ADR in the fourth quarter of 2021 improved by 9% from pre-pandemic levels and reached its highest point since opening in September 2019.

The company said residential business will contribute 25% of total revenue in 2022.

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