MBK Mulls Hotel-Condo Development In Pattaya

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MBK mulls hotel-condo development in Pattaya

Kwanchai Rungfapaisarn

The Nation

Group to focus on financial business as rice trade declines

BANGKOK: -- MBK Group said yesterday that it was considering the development of a mixed-used property project worth Bt5 billion to Bt6 billion on an 18-rai (nearly 3 hectares) plot it owns in Pattaya.

The Montien Hotel currently occupies the spot. Its lease with MBK expires next January.

MBK also announced yesterday that it would focus this year on its financial services, comprising instalment plans for motorcycle purchases, and personal loans to foreigners who want to buy condominiums in Thailand.

Its financial business now contributes about 20 per cent of MBK's total revenue, while the contribution from the company's rice business has declined significantly. The government's rice-pledging scheme has had a serious negative impact on the company's export business, greatly hurting its competitiveness against traders from neighbouring countries such as Vietnam.

Suvait Theeravachirakul, president and chief executive officer, said MBK was considering several options for the Pattaya land plot, including selling it for a huge profit, or developing the site into a mixed-used commercial complex comprising a hotel and condominiums.

"If we decide to develop a mixed-used commercial project in Pattaya, we will find a partner with expertise in hotels and condominiums. The development process will take about four years and require investment of between Bt5 billion and Bt6 billion," he said. Suvait said MBK also planned to spend Bt400 million to Bt500 million on a complete facelift for its MBK Shopping Centre in Bangkok, which will take about three years. About Bt200 million of that amount will be spent this year.

MBK, in partnership with Siam Piwat, will also spend about Bt500 million to develop a new 40,000-square-metre extended mall beside the Paradise Park complex on Bangkok's Srinakarin Road. Expected to take about two years to develop, construction work on the new mall will start by the end of this year. It will be located on a 6-rai plot and serve lower-income consumers, whereas Paradise Park targets better-off shoppers, Suvait said.

"We expect our revenues to increase by 5 per cent on average this year, driven mainly by major businesses, which are shopping malls, with 43 per cent of revenue; financial services, with 20 per cent; rice business, 20 per cent; and hotels with 12 per cent," he said.

MBK Group yesterday reported revenue of Bt4.2 billion for the last six months of 2011, up 5.1 per cent over the same period of 2010.

Of that, Bt1.8 billion came from its shopping-mall business, up 13.8 per cent over the same period of 2010. It posted Bt511 million revenue from hotel and tourism, up 21.1 per cent, and Bt334 million from financial services, up 15.8 per cent over the same period of 2010.

Three major businesses - golf courses, real estate and rice - showed a significant drop in revenue in the second half of last year.

MBK's golf-business revenue dropped 8.2 per cent year on year to Bt134 million in the last six months of 2011. The company posted a 23.3-per-cent drop in revenue from real-estate business to Bt151 million. It saw revenue of Bt1.2 billion from the rice business, down by a significant 11.2 per cent from the same period of 2010.

-- The Nation 2012-04-11