Fico to develop four CBD projects in 2008

Today's Business News - Wednesday December 12, 2007

PROPERTY / NEW DEVELOPMENT

Fico to develop four CBD projects in 2008

Projects on Samui also in the works

KANANA KATHARANGSIPORN

Fico Group, owned by the Srichawla family, plans to invest 4.5 billion baht to develop four projects in the central business district (CBD) and Samui next year, says Sorakrich Vora-Urai, the company's chief financial officer.

''We're also talking with a few partners to set up property funds that should have a size of at least seven billion baht if they are formed overseas. We will group our portfolio of future property projects before setting up [the funds], which should be from 2008 onwards while we will get listed in 2010,'' said Mr Sorakrich.

The CBD projects would include a serviced apartment building in the Lang Suan area on a 1.5-rai site where the Ad Makers Pub & Restaurant is currently situated. With an investment of one billion baht, it would have 22 storeys with 166 units and a total area of 7,275 square metres.

By the third quarter of 2008, the company would spend one billion baht to develop a 300-room hotel with a shopping centre on a two-rai site on Phloen Chit Road that it would lease for 30-years.

It also plans to renovate the former Silom Plaza Hotel, which the company acquired in February 2007. The 200-room hotel would reopen by 2009, said Mr Sorakrich.

In March 2007, the group also took over Laem Set Inn on Koh Samui and bought some plots of land nearby to develop a five-star hotel with 300 rooms and condominium and villas.

The Samui project is a joint venture with MAI-listed Siam2You, which spent a total of 65 million baht to acquire 22.94% of shares in Fena Park Co and 31.38% in Casa Fico Co, both subsidiaries of Fico Group.

''S2Y's new management team has experience in property portfolio management and knows foreign investors, which will contribute to our group's business,'' he said.

Fico Group, which changed its name from Fenatex International last year, has been active in the textile business for 60 years before diversifying into property in the past four years.

It has invested a total of 7.1 billion baht in five projects in the CBD area. Last year it sold the 30-year leasehold Fenix Tower with 12 storeys and a rentable area of 21,000 sq m located on Sukhumvit Road to ING Real Estate.

It has also a joint venture with the Singapore-based investor City Development Limited in the 327-room Grand Millennium Sukhumvit Hotel worth 2.6 billion baht located on Asok Road.

Another is Interchange 21, an office building with a total area of 50,000 sq m on Sukhumvit Road, which is held through a joint venture with the Swiss textile firm Bishop. The return on investment would be 15%, he said.

Net profit generated from the property business this year would be around 80-90 million baht, while the textile business generates 800-900 million baht a year for the group.

Bangkok Post