Thai developer Urban Holdings spends B2.6bn on latest deals
Taps strong demand near mass transit
18 March 2019
Commercial property developer Urban Holdings Co will spend 2.6 billion baht to develop a mixed-use project near Ratchayothin junction and an office tower in the On Nut area to capitalise on strong demand and limited supply in the office sector.
Managing director Wutthiphon Taworntawat said demand for office space near mass transit stations is strong but supply is limited.
“Office space for rent should be near mass transit lines to attract both tenants and those working for tenants,” he said. “In locations where supply is limited, development of new offices is attractive.”
Last Friday, the company signed a leasehold contract for 30 years to rent a 3.5-rai plot on Phahon Yothin Road near Ratchayothin junction opposite the Chang Building to develop the mixed-use Ratchayothin Hills.
With an investment of 2 billion baht, it will be a high-rise tower with more than 30 storeys and a lettable area of 15,000-20,000 square metres, comprising office space and hotel rooms. Construction will start this year and be completed in 2022.
“Offices and a hotel in one place can complement each other,” Mr Wutthiphon said. “Office tenants can use meeting rooms or food and beverage services at the hotel.”
The tower can also utilise resources like parking lots and air-conditioning systems, as heavy use by offices and the hotel occurs at different times.
In the On Nut area, the company will spend 600 million baht to develop Onnut Hills, an office tower located on a leasehold 1.5-rai plot on Sukhumvit Road near Sukhumvit Soi 58, slated for completion by 2022.
With a total lettable area of 7,000 sq m, 6,500 sq m will be office space with an average rent of 800 baht per sq m per month. Some 500 sq m will be retail with an average rent of 1,500 baht per sq m per month.
The low-rise tower will also have a meeting room sized 200 sq m for rent, which can be divided into smaller rooms sized 50, 100 and 150 sq m.
This year the company under the UHG (Urban Hospitality Group) brand will open two new hotels, The Quarter Phromphong with 84 rooms on Sukhumvit Soi 31 in the third quarter and 113-room The Quarter Ploenchit on Soi Ruamrudee in the fourth quarter.
In the second half of 2020, The Quarter Silom on Silom Soi 6 and The Quarter Ruamrudee on Soi Ruamrudee with 160 rooms each will open.
By 2021, the company will launch resort-style hotel The Chao Phraya Bangkok with 250 rooms on a six-rai plot on the banks of the Chao Phraya in the Khlong San area.
“All our new properties are situated on leasehold plots,” Mr Wutthiphon said. “We got many pieces of leasehold land in recent years, thanks to the new land and buildings tax that compelled landlords to utilise assets.”
He said many landlords do not want to sell their plots, but leaving them vacant will incur a higher tax rate under the act.
Mr Wutthiphon said the company aims to double operating profit to 1 billion baht by 2020, when it will have 1,500 hotel rooms and a combined 40,000 sq m of office space.