Wallapa Traisorat, the second daughter of Thailand's fourth-richest tycoon, Charoen Sirivadhanabhakdi, is starting a new chapter: getting a family-controlled property business listed on the stock market.
"During my childhood, whenever the family had a trip, it was always a tour of the family's businesses," says Mrs Wallapa, 45. "At that time they were not property businesses, but distilleries and breweries, the core business my father focused on."
The family's property business started in 1989 when TCC Group, a conglomerate founded in 1960 by Mr Charoen and wife Khunying Wanna, acquired Pantip Plaza, the popular IT mall in Bangkok.
Though the first piece Mr Charoen bought was a land plot in Ban Phe, Rayong in 1975, Pantip is regarded as the family's first asset because it was a performing asset, unlike a land bank that doesn't generate cash flow.
The second property was Mae Ping Hotel in Chiang Mai, bought in 1991. TCC Group then expanded to invest in the Imperial Hotels Group in 1994 with seven hotels in key Thai destinations.
Mrs Wallapa says her father would buy the properties sight unseen, as he usually knew what and where they were and most were offered by owners asking for his help.
"He has never travelled to see the properties himself," she says. "If he did, my mother would always break him [into buying]. My parents always travelled together since their marriage."
Each asset had its own management team in place at the time of TCC Group's acquisition. The group took the property business seriously because Mr Charoen has a passion for land and was becoming interested in property development.
"Because I love arts, maths and physics, I chose architecture and further studied land economy and urban planning without knowing that the family had a property business," Mrs Wallapa says. "It was a coincidence."
After finishing her postgraduate studies in England, she worked for Merrill Lynch Asia Pacific Ltd in Hong Kong as a financial analyst until her father called her home in 2001.
At that time, only Pantip Plaza and the Imperial Hotels properties were generating income. The others were land plots and suspended projects for which she was to continue development to minimise the heavy cost.
"He asked me to help manage TCC Holding, one of the group's subsidiaries, which invested in land bank plots," Mrs Wallapa says. "As the land bank did not generate income, I organised the portfolio and prioritised which ones could be developed as performing assets."
Mrs Wallapa played a significant role in the family's property business, co-founding TCC Land Co in 2002 to combine and manage all the group's properties, including hotels, shopping complexes, office towers, convention centres, golf courses and land bank plots.
In 2003, TCC Land formed a joint venture with CapitaLand, one of the largest property developers in Singapore and Asia. They set up TCC Capital Land Co, with TCC owning 60% and CapitaLand 40%.
The joint venture focused on residential development, starting with the Athenee Residence luxury condo on Wireless Road in 2004. It was the first project to which Mrs Wallapa applied her architectural knowledge.
"I learned the property development process from our partner, as it's a large and professional developer with world-class standards," she says.
But the joint venture discontinued the business as CapitaLand focused on property development for sale. Mr Charoen regretted selling land plots, particularly in prime locations.
Mrs Wallapa and her family in front of New York's Plaza Athenee, the first overseas hotel acquired by TCC Group in 1997.
"The more projects we developed for sale, the more his regrets were," Mrs Wallapa says. "He said land plots like the one where the Athenee Residence is located are rare. The land value rose five times from 2004 to today. Its capital gain was higher than the profit from residential development."
If this plot was developed as a long-term investment property, it would take just two years to generate the same profit as that from a residential development, she reckons.
"He said we sold eggs, not hens. We should raise hens and gradually gain from their eggs," she says. "If land in a prime location is developed as property for sale, it will be harder to seek a new one like that."
This theory was the origin of Asset World Corp Plc, a holding firm under TCC Group. AWC selects the best properties from the group for its portfolio.
AWC, which plans to list on the Stock Exchange of Thailand in the second half of 2019, has two property categories -- hospitality and retail/commercial buildings -- aimed at long-term investment.
According to a company filing on June 7, 2019, AWC is the owner and developer of 15 hospitality properties, 10 of which were in operation and five under development.
The 10 hotels with a total of 3,432 rooms include six in Bangkok, three in Koh Samui and one in Chiang Mai. The largest is the Bangkok Marriott Marquis Queen's Park on Sukhumvit Soi 22.
According to the filing, the average daily room rate of the 10 hotels is 5,158 baht and the average occupancy rate is 82%. Revenue per available room is 4,233 baht.
The five hotels under development will be in Bangkok, Phuket and Krabi. AWC has also agreed to acquire 12 hotels from TCC Group by the end of the year. In total it will have 27 hotels with 8,500 rooms, making it one of Thailand's largest hoteliers.
For retail/commercial buildings, AWC has eight retail projects, seven of which are in Bangkok and one in Chiang Mai, with a combined net lettable area of 165,628 square metres and an average occupancy rate of 72% as of March 31, 2019.
The company is developing two new projects, Community Market Bangkapi and AEC Trade Center (formerly Talad Tor Yod), for wholesale trade. By 2025, net lettable area will rise by 51% to 249,853 sq m.
AWC also owns four office towers -- Empire Tower, Athenee Tower, 208 Wireless Road and Interlink Tower -- with an occupancy rate of 85% and a total net lettable area of 270,594 sq m, making the company the country's biggest office landlord.
Some 90% of AWC properties are freehold, unlike other developers whose assets of the same kind are mostly leasehold, Mrs Wallapa says.
According to filings, AWC last year recorded nearly 11 billion baht in revenue from the core business, growth of 5% from 2017. Of the amount, 6.68 billion baht was from hospitality and 4.31 billion baht from retail and office.
In the first quarter, AWC posted 2.9 billion baht in revenue, down from 3 billion baht in the same period last year. Revenue from hotels was 1.85 billion baht, while revenue from commercial properties was 1.93 billion baht.
With a grant-of-rights agreement with TCC Group, AWC will continue to acquire the group's assets for its portfolio every year for long-term growth, says Mrs Wallapa, who is president and chief executive of AWC.
"TCC Group's assets under TCC Land are regarded as AWC's pipeline," she says.
Mrs Wallapa has helped TCC Group develop and renovate 32 hotel and retail projects worth tens of billions of baht in the past six years.
"AWC does not need to hold land bank plots, because the group gives AWC a right to buy first," she says. "When AWC is ready, it will buy to develop. This makes AWC's potential different from other developers."
AWC's investment size is expected to scale up as the business base expands. This will also drive AWC to invest in more large-scale and mixed-use developments, since many of the group's plots are large.
One such project will be in Pattaya, where AWC plans to develop a convention hotel by the beach with more than 1,000 rooms and some tourist attractions. The plot is in the centre of Pattaya near the site of a future high-speed rail station.
"AWC combines key properties in major tourist destinations in the portfolio," Mrs Wallapa says. "We will focus mainly on properties in Thailand at the moment, as the country has strong potential."
Another key strategy for boosting growth is synergy with the ecosystem of TCC Group, including food/beverage, finance, insurance, industry, trading and agricultural products.
Since the management team of TCC Land moved to AWC, the former is now a holding firm for the group's land bank plots and properties awaiting purchase by AWC for development.
"My father today frequently phones me to offer land plots and asks me to make a quick study," Mrs Wallapa says with a laugh. "He is now a [land] seller, no more a buyer."
BIO DATA
Wallapa Traisorat
Age: 45
EDUCATION
- Bachelor of Architecture, University of Fine Arts, Silpakorn University
- Master of Science, regional and urban planning, London School of Economics and Political Science
- Master of Philosophy, land economy, University of Cambridge
CAREER
2005-present: President and chief executive, Asset World Corp Plc
2003-present: Executive director, TCC Capital Land Ltd
2007-08: Deputy chief executive, TCC Land Development Co Ltd
2005-08: Deputy chief executive and executive director, TCC Property Development Co Ltd
2001-08: Executive director, TCC Holding Co Ltd
1999-2000: Analyst, corporate finance, Merrill Lynch Asia Pacific Ltd
FAMILY
Married to Soammaphat Traisorat, five children
HOBBIES
Swimming, tennis, golf, art, travel, computers
