Singha Estate Plc (S) is a lifestyle developer that builds quality settings for people to live, play, work and shop. Chief executive Naris Cheyklin discusses the company's strategy and outlook.
Please explain Singha Estate's history.
Singha Estate is a real estate investment and development company and the property arm of Boon Rawd Brewery Co. The company was created through a reverse acquisition of Rasa Property Development Plc and the entire business transfer of companies under Boon Rawd Brewery Co and Khun Santi Bhirombhakdi. Real estate has been a part of the group's overall business portfolio, and given that the dynamic of this industry is capital-intensive and long-term focused, the group is well-positioned and confident of rising to the challenge of making Singha Estate a prominent real estate and development company in Thailand and the region.
Please explain Singha Estate's business model.
Naris: Leery of risks in current market
Our focus is on the three major sectors of the real estate industry: residential, commercial and hospitality. With residential our aim is to reinforce our expertise and build a quality-oriented brand with both low-rise and high-rise projects. On commercial we want to further capitalise on our team's retail and commercial asset management expertise with office buildings and mixed-use properties. And finally, with hospitality the aim is to optimise hospitality assets -- capitalising on existing properties and enhancing their value through refurbishment and room expansion. This type of property provides a strong recurring earnings platform to Singha Estate for future expansion. With each sector our aim is to continue expanding either via greenfield or brownfield projects.
Could you provide information on your existing and potential future projects?
For low-rise residential, Nirvana has 10 existing projects with a total remaining project value of 11 billion baht. For high-rise residential we are launching The Esse Asoke, a condominium project located on a 2.5-rai land plot on Asok-Montri, which has a project value of over 4 billion baht. For hospitality we have a 78-key premium asset on Koh Samui, the Santiburi Beach Resort & Spa, a five-star hotel that has been fully refurbished and relaunched in December 2014. We recently acquired a 112-key resort on Koh Phi Phi, the Phi Phi Island Village Beach Resort, which is undergoing a refurbishment and key addition. Finally, with commercial we have three ongoing projects: The Lighthouse, an existing retail space whose renovation is due to be complete in October 2015; Suntowers Complex, a recently acquired large-scale office complex with an investment value of 4.6 billion baht; and Singha Complex, a mixed-use development comprising a Grade A office tower with small retail space. The latter is located on an 11-rai land plot at the Asok-Phetchaburi intersection (previously the Japanese embassy) and is due to launch in the first half of 2018.
What differentiates Singha Estate from its competitors?
We are unique in that we are the only listed developer that focuses on various sectors of properties. And we are able to do this because of our experienced team that has in-depth real estate expertise.
What are the biggest risks facing your business?
Given that part of our expansion plan is to acquire existing assets, there is no guarantee that past performance of assets will result in the same performance going forward, regardless of our intensive due diligence process. We also have to ensure that our team is synchronised, working towards a common goal for the benefit of all stakeholders in the company. And finally the current political and economic environment in Thailand is not ideal.
What impact will the AEC have on your business?
It is an opportunity and the question is whether or not we are ready with the expertise and capital required to expand throughout the region. We have looked closely at our neighbours such as Myanmar and Cambodia and do believe that they are both potentially attractive markets for commercial, industrial or residential development. However, we want to be certain and understand all the potential risks instead of rushing into these new markets.
Where do you see Singha Estate in five years?
We are currently the fifth-largest property company in the sector and aim to be the largest by 2019. Our aim is to balance our property portfolio between commercial and residential with recurring income assets contributing 50% of revenue. But more importantly than size, we want to ensure that the corporate culture and image of Singha Estate is one of PRIDE, which stands for Partnership, Refined, Integrity, Dynamic and Entrepreneurship.
The Executive Q&A Series is presented by ShareInvestor, Asia's leading financial internet media and technology company and the largest investor relations network in the region. This interview was conducted by Pon Van Compernolle. For more information email pon@rossvancompernolle.com or supat@shareinvestor.com or visit ShareInvestorThailand.com