Neighborhood / Mini Mall Developers

[Heng]

We're looking to put together a list of non-housing developers for one of our plots of land (8 rai) on Sukapibal 3 Road (eastern Ramkhamhaeng Road near the new Nantawan Land and Houses neighborhood, about 2 kilometers from Carrefour). So far, I've only come across Siam Future (these are the folks who do a lot of those Tops / Tesco Lotus Express mini shopping centers often with a bank thrown in for good measure), and am looking for the names of other similar developers so we can do bid/proposal comparisons. The main stipulations are:

-we're not looking to build condos, apartments, or houses on this particular lot.

-we're not looking to sell.

-we don't want drinking or nightlife type businesses in this project.

-It's next to an L&H project, so no loud noise type businesses (like sound systems shops or music stores) either.

-It's a long narrow plot (only 38 meters wide streetside), so any big warehouse type hypermarket or car dealership will likely be too space limited.

Any help would be appreciated. For those who have experience in this type of development or simply wish to discuss matters regarding these types of developments in Thailand are welcomed to contact me as well.

thanks!

-Heng

[steveromagnino]

Siam Future are definitely the ones most likely that I can think of, off hand cannot think of any others that specialise in this type of development.... hmmm....

I actually just met with another major tenant yesterday moaning about Siam Future...they aren't perfect (although very good in some ways) and I think there is a gap in the market for this sort of thing right now which Siam cannot necessarily meet. I suspect Siam Future will ask a few of their major partners e.g. Major, whether they want to go or not, and base the whole development around that. It isn't thinking out of the box, and it may overlook a better idea.

I think you would be better to figure out what sort of development is right for that land, and then come up with a concept and then outsource the design, building and leasing. Especially if you want to maintain ownership of the land. I can actually immediately suggest some concepts for that size plot, and PM me if you want to meet up or discuss this; this is very similar to the business I do now. I can recommend people to do all these steps, and can offer you some help if you need it in putting the thing together if you want to do more than just finding a developer (which I strongly recommend).

Due to the new regulations, other than a <300m2 hypermarket, you cannot open a supermarket there or hyper market (the food and no food in the same place) and this starts to curtail your options for the plot. Without the supermarket, how can you pull people on a regular basis? Unless the zoning is one of the fabled 'black spots' without control on hypermarkets, but I severely doubt it.

Have you done a catchment population sizing? What other developments are in the area>? Would you consider doing rerearch to establish what residents of LH are looking for? how successful is Carrefour? What are the incomes and living standards of the people within a 15 minute by drive radius for the development plot? What is the size and occupancy rate of LH? What other plans do LH have in the area or any other major developers? Who owns the sites nearby and what plans are laid out for those IYHO?

8 Rai is a decent size for something, that's for sure. It may turn out in the analysis that you need to wait for more infill housing; most of tenants in a situation like this will be wanting to see decent turnover from day 1, and for the hyper markets (even a lotus express or even compact format if it meets zoning) they will expect profit within at most 3 years, but you need to be showing VERY good reasons why they woudl not get in year 1 and 2 but it would be a definite in year 3.

[Heng]

PM on the way Steve. Might be worth mentioning that our family (my side, not to be confused with my wife's side who are doing that project in Pattaya I mentioned several months ago) rarely develops anything out of pocket. We have almost always left that to our tenants. A *long term lease + build whatever you want (but run it by us first)/but you can't tear anything down, our main concern is that you pay your rent on time* business motto, kind of like what the dept. of railways does.

Edited February 23, 2006 by Heng

[steveromagnino]

kind of like what the dept. of railways does.

A greet model to base yourself on, the SRT

Understand completely, check out my reply.

There are ways around it to avoid being out of pocket, I know my main client have the problem that 20 years later they want to get the land back, and have to sit around for another 10 while the lease runs out....