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Pacific Star International (Thailand) is negotiating to buy several property projects, including residential, hospitality and office buildings, worth up to 3 billion. It hopes to close the deals during the final quarter of this year or early next year.
The company, whose parent is based in Singapore, manages part of the Asia Real Estate Income Fund worth $500 (23 billion baht) in Thailand. The firm started to expand its investments in Thailand last September by taking over two condominium projects on Sathorn Road and Soi Thonglor - worth a combined 5.1 billion baht.
Country head Printpal Singh Gill said the group had confidence in its investment in Thailand in spite of political problems and the appreciation of the baht.
"We started to expand our investment at the time of Thailand's political change on September 19, 2006, because we were confident in the economy and believed our investment would not get a negative impact from political problems. We have also continued to expand our investments this year because we believe they will generate yields of up to 10 per cent," he said.
Last year the company took over Sathorn Gardens from Sathorn Real for 1.7 billion baht and took over a condominium project on Soi Thonglor worth 1.5 billion baht. The company has also spent 400 million baht to renovate Sathorn Gardens and 1.5 billion baht to rebuild the condominium project at Soi Thonglor, bringing its total investment in Thailand to 5.1 billion baht or 22 per cent of the property fund.
The company's asset manager Urasate Navanugraha said it expected sales from Sathorn Gardens to be 3 billion baht after a l project investment of 2.1 billion baht, with condominium prices of 87,000 baht per square metre. The starting price for a studio apartment is 3.4 million baht. Having taken over Sathorn Gardens last year, it is now ready to rebuild the project and tomorrow will start to pre-sell the first phase of 195 units out of a total of 350.
"We expect sales of 2 billion baht from the first phase of Sathorn Gardens, and the units will be ready for transfer to customers next January," he said. Gill said that when the company's management approved the deal to take over the two or three new projects that are now being negotiated, it would be ready to expand its investment worth 1 billion baht per project immediately. That means Pacific Star has an unlimited budget to expand in Thailand.
"Although our investment cost this year will be higher than last year as a result of the baht's appreciation, we believe the return from our property investments will outpace our costs from the stronger baht," he said.
He added that the Foreign Business Act would not affect business in the Kingdom because when the group expanded its investment in each country it always followed that country's legal requirements.
"We are not speculators, we are real investors, so if the law is appropriate for each country, we are ready to follow it," Gill said. Pacific Star Group manages three property funds: the Eureka Office Fund worth US$580 million (19.72 billion baht), the Asia Real Estate Income Fund worth $500 million and the Baitak Asian Real Estate Fund worth $600 million. The three funds have expanded their investments in Singapore, Malaysia, Japan, China and Thailand.
The group is interested in expanding in India, Vietnam and other countries in Southeast Asia though the return on each investment has to be higher than 10 per cent per year, said Gill
The Nation: (2 August 2007) |
