19 Oct 2015

Singha Estate takes huge step, announces its 3rd quarter progress and move forward to invest in UK.

October 19, 2015, Anantara Siam Hotel Bangkok: Singha Estate Public Company Limited, “S”, sees the results of its continuing focus on growth through the acquisition of quality assets, joint ventures and investment in residential and commercial property construction during the past three quarters of 2015.

Mr. Naris Cheyklin, CEO of Singha Estate PLC, said that progress during the first three quarters of the year has been encouraging and fully in line with the company’s expectations including: the launch of The ESSE Asoke - a luxury high-rise condominium right in the heart of Asoke; commencement of construction of the Singha Complex - a mixed use office / retail development at the junction of Asoke and Petchaburi; the entire business transfer of the Suntowers office building complex on Viphavadee-Rangsit Road; and the recently completed joint-venture purchase of 26 Mercure branded hotels in the UK.

“A highlight for Singha Estate during the first three quarters was the launch of The ESSE Asoke, which will be completed in 2018 at a value of Baht 4,534 million. This is a luxury condominium which is situated on the site of the legendary Singha Beer House and will be the highest building in the Asoke area with 55 floors and 419 exclusive units and a car parking ratio in excess of 100%. It is destined to be an icon of modern living and will boast the finest facilities currently on offer in the market today.”

“Construction was also commenced on the Singha Complex, a major landmark mixed-use project at the junction of Asoke and Petchaburi roads on the site of the previous Japanese Embassy which will entail an investment of Baht 4,250 million and will open for business in late 2017. A key tenant already signed up with a 50-year lease is Boon Rawd Brewery, who will relocate their executive offices to the upper floors of the Singha Complex Office Tower for an overall rental fee of Baht 1,900 million,” said Mr. Naris.

“In addition to these company investments, Singha Estate also completed the entire business transfer of the Suntowers Office complex of Viphavadee-Rangsit Road, which has given the company a substantial foothold in the rapidly improving office rental market in northern Bangkok.” Mr. Naris explained that the transaction would also provide immediate revenue and profits in the short term, which will contribute improved recurring incomes in the future once planned improvements and upgrades are made to the lobby, plaza (retail space) and car parking facilities.”

Mr. Naris also announced that Singha Estate had entered a 50:50 joint venture with FICO Holding (UK) Limited to form a joint-venture company FS JV Co Limited, which has just recently completed the outright purchase of 26 hotels in the UK which trade under the Mercure brand for a price of Baht 8,500 million. “In all, 2,883 guest rooms make up the portfolio of these 26 hotels of which 20 are freehold and the other 6 are long-term leasehold on favourable terms. Currently, annual occupancies are 66% on average and the properties are well located throughout mainland UK in city, resort and business areas which ensure the group can fully respond to business opportunities that arise in the recovering and expanding UK hospitality market with a particular highlight and focus on MICE events for which the hotel properties are well suited.” Mr. Naris further elaborated that making this major acquisition on the UK was part of the Singha Estate strategy to focus on hotel business investments both in Thailand and overseas where diversification into established markets in separate geographical locations offered the potential for attractive returns and reduction of portfolio risks. He also added: “the investment in the UK will immediately provide cash flows and profits to Singha Estate in line with the agreed ownership proportions.”

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