FPT plans B13.7bn investments

FPT plans B13.7bn investments

A factory unit in Rojana Industrial Estate in Prachin Buri, one of 27 industrial properties FPT will sell into FTREIT in September 2022.
A factory unit in Rojana Industrial Estate in Prachin Buri, one of 27 industrial properties FPT will sell into FTREIT in September 2022.

SET-listed developer Frasers Property Thailand (FPT) plans to spend 13.7 billion baht on hotel, housing and industrial properties over the remainder of the year as the real estate sector continues to recover following the country's reopening.

Chief financial officer Somboon Wasinchutchawal said most of the investment budget, accounting for 10 billion baht, has been allocated to housing development business, including new land purchases and home construction.

Another 2 billion baht has been earmarked for the development of new industrial properties, while 1.7 billion baht will be for the purchase of the remaining leasehold rights for the land and buildings of Mayfair Marriott Executive Apartments from GOLD Property Fund.

The funds will come from cash, operating income, loans, and proceeds from the sale of 27 industrial and logistics properties with a lettable area of 76,675 square metres in Ayutthaya, Prachin Buri and Chon Buri, worth 1.65-1.75 billion baht, to the Frasers Property Thailand Industrial Freehold & Leasehold REIT (FTREIT) in September 2022.

Thanapol Sirithanachai, country chief executive of FPT, said the robust industrial property sector stemmed from growing demand for short-term leasing contracts for factories and warehouses.

"A better outlook is expected in the second quarter of this year," he said.

In the first quarter of 2022, the occupancy rate for rental factories and warehouses was 85% on average, driven by demand from e-commerce business.

For commercial properties, both the retail and hotel sectors have tended to recover after the country's reopening.

At the Samyan Mitrtown development in Bangkok, the number of average daily shoppers recently rose to 40,000-50,000, from 35,000 in March, while the pre-pandemic level was 65,000.

Mr Thanapol said the average occupancy of five hotels with 1,100 rooms increased by 7% to 47% in the first quarter of 2022 compared to the fourth quarter of last year, driven by pent-up demand and border reopenings.

For the remainder of the year, FPT plans to launch 15 new residential projects worth a combined 19.5 billion baht, comprising eight single detached house projects, five townhouse projects, and two duplex house projects in the provinces.

"We are shifting to single detached houses as demand remains strong," Mr Thanapol said. "A challenge is the borrowing ability of townhouse buyers."

To cope with surging costs caused by higher prices of construction materials and fuel, the company's housing business has locked up prices with suppliers every six months, while the majority of its products are pre-built, rather than pre-sales units.

FPT also plans to open the new office tower Silom Edge, with 21,332 sq m of space, in September this year. It has a pre-leasing rate of 60% with a rental rate of 800-850 baht per sq m per month.

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