Grand Canal primed for B10bn splurge
It will spend 4 billion baht to continue development of the Grand Rama 9 project.
The company will ask shareholders this week to approve buying a 38-rai plot priced at 7.35 billion baht on Phahon Yothin Road where it and partner BTS Group Holdings won a bid last week.
"We haven't planned what to do with the plot as we need to discuss with our partner BTS," said chairman and chief executive Yotin Boondicharern.
He and BTS's major shareholder are cousins.
"We may develop a mixed-use project or sell it in smaller pieces as the plot is located on both Phahon Yothin and Vibhavadi Rangsit roads," he said.
After depositing 10% of the price on the bid date, both parties have 90 days to pay the remainder, which will partly be through a bank loan, said Mr Yotin.
Last week Baywater Co, a joint venture between Grand Canal and BTS that was founded last year with equal holdings, won the bid for the plot from Bangkok Commercial Asset Management.
The plot is located on Phahon Yothin Road next door to Index Living Mall, along the skytrain extension from Mor Chit to Saphan Mai that recently started construction.
This plot was formerly owned by Univest Land Co, a firm owned by Thatree Boondicharern, Mr Yotin's brother. Univest Land was hit hard by the Asia financial crisis.
"The property market is weak, but we rarely follow sentiment as we have many property categories to develop," said Mr Yotin.
After freezing new residential project launches the past five years, Grand Canal is set to resume next year with Belle Sky condo project on a 30-rai site in Don Muang district near Miracle Grand Hotel on Vibhavadi Rangsit Road.
It will comprise 10 15-storey buildings after the city plan was changed to allow construction of higher buildings in the district. Phase one with 1,000 units worth 3 billion baht will be launched in the first quarter of 2016 with unit sizes of 35 square metres priced about 2 million baht a unit.
The company will also launch two new phases at Grand Canal Don Muang worth a combined 4 billion baht on Cherd Wuttakart Road, including 96 single houses priced from 6 to over 10 million baht and 2,000 condo units priced from 1.5 million baht a unit.
To join the government's property incentive measure, it will launch 100 completed units at Belle Grand Rama 9 sized between 40-100 sq m and priced at 100,000 baht per sq m in the fourth quarter this year.
Last year Grand Canal generated 4.73 billion baht in revenue. It targets the same amount this year after recording 1.8 billion during the first six months.
The company is also developing the Grand Rama 9, a huge mixed-use project at the Rama IX-Ratchadaphisek intersection with a total construction investment of over 35 billion baht. The 73-rai plot with a construction area of 1.2 million sq m comprises five properties including The 9th Towers with a lettable office space of 60,000 sq m, now sold out with a rental rate of 700 baht per sq m per month.
There are two towers with a single tenant each under a 30-year lease contract including Unilever House with 40,000 sq m, completed last year, and Central Plaza Grand Rama 9, opening three years ago.
The Shoppes Grand Rama 9, with retail space on the lower floors of The 9th Towers and Belle Grand Rama 9 condo buildings with a combined lettable area of 18,000 sq m, was also completed.
G Tower with a total lettable area of 61,000 sq m is 20% booked at a monthly rate of 700 baht per sq m. The G-shaped office building will be ready to move in next April, with a target occupancy of 40%.
Future projects on the plot include the Super Tower, expected to be the tallest building in Thailand at 615 metres, and New World Grand Rama 9 Bangkok Hotel with 275 rooms. It will spend 16.4 and 1.99 billion baht to build the two, respectively, and they are expected to generate 2.7 billion baht per year from rent.
GLAND shares closed Friday on the SET at 3.02 baht, down two satang, in light trade worth 456,000 baht.