Thai Real Estate Giant Bets Big on Tourism Recovery with $ 3.2 Billion Growth Plan



CEO of Asset World Corp. Wallapa Traisorat, with funds from one of Thailand’s largest IPOs, is building new hotels and refurbishing tourist attractions in hopes of a post-pandemic boom.

WWith Covid-19 still keeping foreign tourists away from Thailand’s pristine beaches and bustling cities, leaving more than 80% of hotel rooms unoccupied, one would expect the CEO of one of the largest developers in the hospitality, retail and office real estate industry to stop squatting. … Instead Wallapa Traisorat, CEO Asset World Corp. (AWC)has charted a five-year growth plan of 100 billion baht ($ 3.2 billion) to prepare her company for a post-pandemic tourism boom. “This is a short-term impact that we are facing right now,” she says. “We see tremendous potential for growth and strength in Thai tourism.”

Wallapa’s optimism is underpinned by financial strength and foresight. First, AWC is a family business. The chairman is her father, Charoen Sirivadhanabhakdiwho ranks 3rd on the list of the 50 richest people in Thailand this year with a net worth of $ 12.7 billion. The rest of the board includes her mother, who is the vice chairman, and her husband, who is the director. Together, the family-controlled businesses own the lion’s share of the company. Wallapa is also one of the handful of female CEOs of a large Thai company.

On the other hand, AWC cashed out with a $ 1.6 billion IPO in October 2019, just months before the pandemic. Led by Wallapa, it was the largest-ever listing of a real estate company on the Thai stock exchange. The company currently has a market value of around 146 billion baht, with a share price of around 4.5 baht, compared to a placement price of 6 baht.

After the IPO, Wallapa further ramped up funding for AWC, saying the firm also received baht 50 billion lines of credit from two Thai banks, including a 30 billion baht from Siam Commercial Bank, to prepare for “growth and investment.” In its first quarter report, AWC had assets worth 72 billion baht, as well as nearly 1 billion baht in cash and receivables, but only 44 billion baht in long-term debt.

Strong financial performance helped AWC cope with an 83% drop in tourist numbers last year from a record high of around 40 million in 2019. Revenue fell 54% in 2020 to 6.1 billion baht, leading the company to a loss and falling another 56% year on year in the first quarter with a net loss of 594 million baht.

However, those numbers did not stop Wallapa from designing four new 1,600-room hotels, adding nearly 5,000 rooms to the 17 AWC hotels. In February, it also acquired the 287-room Sigma Jomtien Pattaya for 550 million baht.

However, AWC’s most ambitious projects reflect Wallapa’s expertise in architecture and land management. About 30 billion baht will be spent on redeveloping Bangkok’s historic Chinatown and coastal areas, and transforming Pattaya, an infamous beach town south of the Thai capital, into a conference and exhibition venue.

“We see tremendous potential for growth and strength in Thai tourism.”

Wallapa traisorat

“We are committed to creating an integrated lifestyle real estate team with a focus on Thailand,” Wallapa, 47, says in a rare video interview from her office in Bangkok. “This is a strategy to prepare AWC for future growth.” Before the pandemic, hotels accounted for 60% of the company’s revenues and include seven hotels in the Imperial Hotel Group, which Charoen bought in 1994, as well as the Marriott Marquis Queen’s Park, The Athenee Hotel and Okura Prestige in Bangkok.

Wallup expects hospitality to remain a key growth driver, and last October announced AWC’s plan to build four new hotels to be operated by Marriott International, including the Ritz-Carlton Reserve and the first Autograph Collection hotel in Thailand.

“They are one of the hippos in [Thai] industry, ”says Nihom Jensirirathanakorn, director of Bangkok-based consulting firm Horwath HTL. “They are expanding using their size strategically and with all their capital.”

In the May report, Bangkok is expected to lead the Thai hotel industry’s V-shaped recovery, which will begin in the second half of 2022. Phuket will follow suit in 2023 when travel restrictions are lifted completely and reciprocal travel arrangements are made. with key markets such as China, Japan, Singapore and South Korea.

TThe second of five children, Wallapa accompanied her parents as they grew up in Thailand on vacation, which inevitably involved excursions to family businesses, which at that time mainly included breweries and distilleries (Charoen’s Thai Beverage – the producer of the popular Chang beer).

She recalls how her father bought real estate without any development plans, creating a huge land bank that Wallup would work with decades later. These include the beautiful sea-view location where Banyan Tree Krabi opened in October.

After completing her degree in architecture from Silpakorn University in Bangkok, Wallup went to the UK where she earned her Master’s in Regional and Urban Planning from the London School of Economics and then her Master’s in Philosophy in Land Economics from the University of Cambridge. She began her career as a financial analyst at Merrill Lynch in Hong Kong in 1999, and the following year married her high school sweetheart, Soammafat Traisorat.

She joined her father’s diversified TCC Group in 2001 to focus on real estate activities, which were merged into AWC in 2018. The Traisorat have five children and Soammafat, the former CEO of TCC’s joint venture with Singapore-based CapitaLand. is the director of the AWC board of directors.

“This is an interesting transition,” says Bill Barnett, managing director of C9 Hotelworks, a consultancy in Thailand, noting that Wallapa is highly regarded for building a professional team and focusing on working with a select group of partners. “She builds strong relationships. It’s a clear strategy, ”he says.

Unlike some of the big hoteliers in Thailand who have built their own hotel brands at home and expanded their operations overseas – such as Onyx and Amari Italthai Group hotels and Centara Central Group – AWC has a strong focus on Thailand, where its hotels are operated by renowned regional and global companies. hotel chains. “It’s more like a big international hotel investment company,” says Nihom of Horwath HTL. “AWC is trying to create a win-win ecosystem.”

FWith recent deals with Marriott and Hyatt Hotels, Wallapa is planning new developments with Singapore-based Banyan Tree Hotels & Resorts. While Banyan Tree has its own Thai resorts, it operates AWC properties in Krabi and Koh Samui. “Asset World has gone through a lot of changes,” says Ho Kwon Ping, founder and executive chairman of Banyan Tree, who has known for seven decades. “They want to be known not by guests, but by the investment community.”

Having tidied up AWC’s hospitality division and refurbished most of its malls, Wallapa has focused on three major urban redevelopment projects: a 16.5 billion baht mixed-use complex for Bangkok’s Chinatown, an 8.1 billion baht bet on reimagining Pattaya, and Expansion of the vast 5.8 billion baht open-air mall Asiatique The Riverfront in Bangkok.

Built in the 18th century, Bangkok’s colorful Chinatown has long attracted tourists and has been patronized by locals for its street food. However, it lacks adequate parking, metro lines and tourist infrastructure, making it one of the most densely populated areas in the city. Wallapa plans to change that by creating an InterContinental hotel along with a “very chic” Chinese boutique hotel, shops in restored historic buildings, Bangkok’s largest underground shopping mall, parking and storage facilities, and a festival market.

While the project, named Woeng Nakhon Kasem after the traditional Chinese market that once existed, has been criticized for over-commercialization, Wallapa says, “We believe we can enrich the community, improve the culture and history of how Bangkok began. The project will become the flagship and hub of Chinatown. “

Transforming Pattaya – a former Vietnam War playground and a low-profile sex tourism destination – seems like a high-stakes game. But Wallapa doesn’t think so, saying she believes a new international airport, which is proposed to be built by 2023, and a planned rail link linking Pattaya to Bangkok’s two airports, as well as a monorail that will run right outside the AWC center, could transform its to a global getaway like Phuket.

“Pattaya has a lot of image problems,” says Jeremy O’Sullivan, head of research at the consulting firm Savills in Thailand. “But they are one of the few companies that can do something like this.” Horwath HTL’s Nihom agrees, noting that while AWC has the money and can bring in the right partners to rebuild Pattaya, success will largely depend on how quickly the public infrastructure develops. After all, Thailand is known for delays.

AWC’s third major project is the further expansion of the expansive 12-acre Asiatique development. Wallapa plans to add a high-end Marriott hotel and apartment buildings alongside Bangkok’s tallest skyscraper. On board is legendary architect Adrian Smith, whose work includes Shanghai’s Jin Mao Tower and Dubai’s Burj Khalifa, which she says designed the iconic 100-story riverside tower.

While real estate professionals like O’Sullivan wonder if the pandemic will cause a repeat of the property sell-off that took place during the 1997 Asian financial crisis, Wallup remains wary.

While AWC’s pile of cash and deep pockets have attracted a lot of potential deals, prices haven’t dropped to levels that it finds attractive. “We were offered about 200 projects,” says Wallapa, adding that the expectations of most sellers are not true. “It’s hard to find the right opportunity,” she says. “It’s still an uncertain time.”


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