Parts of Thai tycoon Charoen Sirivadhanabhakdi’s 120 billion-baht ($3.7 billion) downtown Bangkok real estate project could be sold into a real estate investment trust, the head of the development said.
While Charoen’s TCC Group views the One Bangkok project as a long-term asset, a REIT is an option for efficient capital management, though nothing has been decided yet, the development’s Chief Executive Officer Soon Su Lin said.
“It could be an option that we look at once the project is stabilized,” Soon said in an interview Monday in the Thai capital.
Soon is heading up development of a sprawling district covering more than 16.7 hectares (41 acres). The plan is for five office towers, including one of the city’s tallest, as well as shopping malls, hotels and apartments. That represents a bold bet on Bangkok becoming a global metropolis.
“We all believe in the potential of Bangkok to be a global city within the next decade,” Soon said. “It’s well placed — we are the gateway to Cambodia, Laos, Myanmar and Vietnam, a region that has growth potential in the coming decades.”
One Bangkok broke ground in March and the first phase is due to open in 2022, with the rest complete possibly around 2025 depending on demand. The project is a joint venture between Charoen’s TCC Assets (Thailand) Co. Ltd. and the Thai unit of Singapore affiliate Frasers Property Ltd.
Rental values and occupancy rates in the Bangkok office market are at the highest levels in years, according to Colliers International Group Inc.
“There are no concerns about the demand for spaces in phase one opening in 2022,” said Ratchaphum Jongpakdee, deputy managing director at Colliers International’s Thailand branch. “The question is whether demand for the second phase of the planned buildings will be enough.”
Soon, who previously headed up the development of the ION Orchard mall in Singapore, said most top-rated office towers in Bangkok are over two decades old, signaling an unmet appetite for modern buildings.