CPN allots B30bn for expansion

Construction News Vietnam


Central Westgate is the latest shopping mall added by Central Group. (Bangkok Post file photo)

Central Pattana Plc (CPN), the listed property developer under Central Group, has earmarked 30 billion baht to develop four to five new projects during 2016-18 as part of its plan to boost its annual revenue growth to 15% over the next five years.

Of the total budget, 6.45 billion baht is to develop potential projects in 2016, 10.2 billion for 2017 and 13.3 billion for 2018, said chief financial officer Naparat Sriwanvit.

The new projects are slated for Bangkok and major cities, excluding those already announced for Phuket, Nakhon Ratchasima and Nakhon Si Thammarat.

Another 12 billion baht will be allocated during 2016-18 for projects under construction and 4.18 billion for project enhancement.

Financing for these expansions will come from operating cash flow, bond issuance and/or project financing and property funds.

“CPN still aims for further expansion in major economic cities, as well as locations with potential business both in Thailand and neighbouring countries to demonstrate its sustainable growth,” Ms Naparat said.

The company already formed a joint venture with local partners in Malaysia to develop a new shopping complex there at a cost of 7.4 billion baht. It is conducting a feasibility study on market potential in Vietnam and Indonesia.

She said Vietnam has a large population, low competition with a few major players and strong growth in disposable income, but low purchasing power.

Indonesia has a large population and rapid middle-class growth with increasing spending power, said Ms Naparat. The market is sophisticated, but strong competition from existing players, the high cost of funding and unrealistic land prices with insufficient infrastructure limit the market potential.

CPN’s mall expansion in both countries may come via joint ventures.

CPN expects to operate two to three large shopping complexes abroad over the next five years.

The company’s latest mall is Central Plaza West Gate in Bang Yai district, Nonthaburi.

CPN has already transferred some of its assets including Central Pin Klao, Central Rama 2, Central Rama 3, and Central Chiang Mai Airport into Central Retail Growth Leasehold Property Fund. It remains the property manager.

During the first half of this year, CPN reported total revenue of 12.2 billion baht, up 7% from the same period last year, with a 17% rise in net profit to 4.15 billion baht.

Revenue in the second quarter was 6.14 billion baht, up 5% year-on-year, with net profit rising 10% to 2 billion baht.

The company operates 26 shopping complexes in Bangkok and major provinces, seven office buildings and some residential buildings.

CPN shares closed yesterday on the SET at 45.50 baht, up 50 satang, in trade worth 490 million baht.



Source: http://property.bangkokpost.com/news/677232/cpn-allots-b30bn-for-expansion