Thailand’s Pace Development to raise $375.7m via REIT

Construction News

Thailand's Pace Development to raise $375.7m via REITThailand’s listed property developer Pace Development Corporation Pcl plans to sell its assets worth more than 13 billion baht ($375.7 million) into a real estate investment trust (REIT) in the next few years, according to a report in Bangkok Post.

The assets to be sold will include Sky Observation Deck worth 8 billion baht, Bangkok Editon Hotel worth 4 billion baht and the retail building – MahaNakhon Cube – worth 1.5 billion baht.

Pace generates 30 per cent of its revenue from property business and the rest 70 per cent from gourmet food brand Dean & DeLuca, which has 52 branches domestically and internationally. It plans to invest $30 million on adding 50 branches in the US next year and targets to have 300 branches worldwide in 2019.

“We may consider setting up a conglomerate or moving to other sectors like food and drinks in which the price-to-earnings ratio is much higher than in the property sector,” chief financial officer Natha Kittiaksorn told Bangkok Post.

By 2020, it projects the total revenue will grow to 30 billion baht. Half of them comes from Dean & DeLuca, 10 billion baht from property development and 5 billion baht from Bangkok Edition Hotel, Cube Mall and observation deck at MahaNakhon.

Next month, Pace plans to stage a roadshow in Hong Kong to sell the remaining 30 per cent of the 14.5 billion baht worth Ritz-Carlton Residences at MahaNakhon thanks to strong demand among foreign buyers for luxury condominiums in Bangkok, which remain cheaper than properties in Hong Kong or Singapore.

Pace reported total revenue of 3.2 billion baht in the first six months, rising from 1.56 billion baht from the same period last year. Meanwhile, it posted a net loss of 573 million baht, improving from a net loss of 904 million last year.

Half of its revenue was from property business and the other half from Dean & DeLuca. The retail space, the hotel and the observation deck will generate the income next year.