SET-listed developer Sena Development Plc has teamed up with contractor Sangfah Construction & Engineering Co and investment group Aira Capital Plc to develop a 2-billion-baht office building in central Bangkok.
Sena's executive director Kessara Thanyalakpark said an office building is the most attractive recurring-income asset for investment because it has lower risks and income is more stable than similar assets like serviced apartments or hotels.
"A recurring-income asset is very good for investment but returns on investment are very slow. The joint venture can help the company invest in recurring-income assets without bearing high debt," she said.
Sena yesterday signed a memorandum of understanding with Sangfah and Aira in a joint-venture company in which the first two firms will hold no more than 20% each.
Meanwhile, Aira set up a new subsidiary, Aira Property Co, with registered capital of 200 million baht, and will use the new subsidiary to hold at least 60% in the joint venture.
Ms Kessara said the first office building project the joint venture will invest in will be located on a leasehold plot near a skytrain station in inner Bangkok as the leasehold would generate a higher yield than freehold.
The joint venture will finalise a deal with the plot's landlord within the third quarter and development would take at least two years to complete.
In the longer term, the joint-venture firm eyes investing in five office buildings both through new developments and acquisitions with a total investment of 5 billion baht within the next five years. It also plans to put them into a real estate investment trust.
SENA shares closed yesterday on the SET at 3.66 baht, down 2 satang, in trade worth 22.50 million baht.