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entral left stranded on new mall
Partners pull out of Rama IX venture

PITSINEE JITPLEECHEEP

Central Pattana Plc, the SET-listed commercial development flagship of the Central Group of Companies, has been left on its own to develop a three-billion-baht shopping complex on Rama IX Road after three prominent investor groups pulled out of the long-delayed project.

The Sophonpanich family of Bangkok Bank, the Ratanarak family of Bank of Ayudhya and BBTV, and the Univest group all withdrew from the project.

CPN president Kobchai Chirathivat said the Rama IX development had initially been structured as a joint venture called Central Pattana Rama IX Square.

CPN held 60% of the company, and the rest was held by Super Asset Co, owned by Krit Ratanarak, and the Univest Group, whose investors include Yothin Boondeecharoen, Bangkok Bank chairman Chatri Sophonpanich and Premchai Kanasutra, the head of Italian-Thai Development.

The other project partners withdrew due to a change in investment strategy, Mr Kobchai suggested.

Central Pattana Rama IX Square was initially formed a decade ago to co-develop a residential and commercial project located opposite Fortune Town near the MCOT intersection. The joint venture initially envisioned developing a luxury hotel, office complex and convention hall covering as much as 1.1 million square metres.

Mr Yothin remains committed to developing a five-star Amari-branded hotel in the area located near CPN's new retail complex.

CPN recently signed a 43-year lease contract with Super Asset to develop its new Central retail complex on 17 rai of land in the area.

It expects to spend about 3-4 billion baht for the new development, one of 18 new ongoing projects under way for CPN through 2010.

Mr Kobchai said the company expected to spend about six months designing the project and would start construction next year. It is scheduled to be opened in 2010.

Funding for the project will come from existing cash flow, bank loans and the launch of a new property fund.

''Rama IX is a potential location to expand business in the future because there is no major shopping complex in the area,'' Mr Kobchai said.

Besides Fortune Town, which focuses largely on computer and IT products, the area also includes a Robinson department store, Carrefour, Tesco-Lotus and The Esplanade mall.

Mr Kobchai said the location offered good access to Suvarnabhumi Airport and mass-transit links.

CPN's development of the Suan Lum Night Bazaar site on Rama IV Road, meanwhile, is awaiting formal transfer from the Crown Property Bureau, which controls the property, he added.

The CPB has asked to delay the transfer until mid-2008. CPN won the rights to develop the land where the Suan Lum Night Bazaar now sits into a multi-use commercial and retail project with a combined retail space of 150,000 square metres.

In addition to the 44 rai awarded by the CPB in the first phase, Mr Kobchai said, Central Pattana was interested in submitting development bids for the second phase.

CPN was committed to investing around five to six billion baht per year over the next several years on business expansion and development. The company has four projects under way now at Chaeng Watthana, Pattaya, Chon Buri and Khon Kaen.

It is also now studying a new retail project concept near Suvarnabhumi Airport.

CPN shares closed yesterday on the Stock Exchange of Thailand at 34 baht, up 1.25 baht, in trade worth 32.84 million baht.

Source : Bangkokpost : Jul 24, 2007