Pace Development Co plans to raise its capital by one-third to four billion baht this year and start construction piling for its MahaNakhon luxury project this month to bolster buyers’ confidence after a six-month delay.
At the same time, its Israeli partner, Industrial Buildings Corporation (IBC), is committed to continuing its investment in the 18-billion-baht joint venture.
IBC’s chief executive will attend a ceremony marking the start of piling work on June 20, said Pace CEO Sorapoj Techakraisri.
The super-luxury MahaNakhon will be the tallest building in Thailand. But questions have emerged regarding the lack of progress in construction, which should have started last year, and sales, which were affected by the domestic political crisis last year and global economic slowdown after being launched in May 2009.
Mr Sorapoj said customers for 8-10 units worth a combined 300-400 million baht cancelled their bookings after last year’s political chaos, all of them foreigners.
“If these units had not been returned, sales would have been higher,” he said. “Sales are currently at 35%, and we’ve targeted 45% for this year.”
Pace and IBC have spent up to three billion baht to date on the project, which will cost them a total of 11 billion baht.Kasikornbank granted loans for the land cost and construction of the retail aspect.
A second tranche of 5-6 billion baht for construction of the 99-year leasehold condominium complex with 194 units and a 150-room hotel will be released in a couple of months.
Last year, Pace achieved sales of 3 billion baht, up from 1.1 billion in 2009. In the first five months of this year, it recorded 2.4 billion baht in sales and expects 4.9 billion for the full year.
Last year’s revenue included one billion baht from the transfer of some units at Saladaeng Residences, with another 1.5 billion baht expected this year.
Revenue from MahaNakhon will start being realised from late 2014, when construction will be completed.
MahaNakhon units are now going for between 200,000 and 350,000 baht a square metre.
Saladaeng Residences are commanding 140,000 to 150,000 baht per sq m, with 25% of the 132 units remaining.