|By Chadamas Chinmaneevong, Bangkok Post,
ThailandMcClatchy-Tribune Regional News
Nov. 5, 2009--The Charanachitta family, a major shareholder in Italthai Industrial and The Oriental Hotel (Thailand), is expanding into the real estate business and plans to become a leading hospitality developer within the next nine years.
Seven projects to be developed next year include three serviced apartments -- The Oriental Residences on Wireless Road, Amari Residences in Soi Soonvijai and Amari Residences Hua Hin. Others are a three-star hotel on Koh Samui and another three-star hotel and two mixed-use projects in Phuket.
Amari Estate Co, established early this year with 400 million baht in registered capital, will handle all the projects and will open sales next week for its first property, Amari Residences Hua Hin.
The company plans to spend 4.4 billion baht to build the first two projects in Bangkok and its residences in Hua Hin, said CEO Yuthachai Charanachitta.
The budget for the Phuket and Samui projects is yet to be finalised.
The mixed-use Amari Residences in Hua Hin will be a flagship and business model for other projects, he said. But Phuket is the company's main target because of the high potential of the island's tourism industry.
"We want to grow our real estate business firmly," he said.
"The [Charanachitta] family has many land plots in various destinations. Moreover, our construction cost is lower than other developers because we can have support from Italian-Thai Development, the country's biggest contractor, and its subsidiaries."
Mr Yuthachai is a grandson of ITD's founder, Chaiyuth Karnasuta. He recalls that his father, Adisorn, told him that the population would continue to increase but land would not, so the family should enhance the value of its land.
Most future projects will be mixed-use like the Hua Hin property because profits from condominium sales will help finance the hotel business, said Mr Yuthachai.
The company is targeting the three- and four-star segment because the investment per room is lower than for five-star hotels, he said.
The investment cost for a four-star hotel is estimated at about 6 million baht per room, with room rates of 2,000 to 3,000 baht per night. The investment for a five-star hotel is about 10 million baht per room, with rates of 4,000 to 5,000 baht per night, he said.
Amari Co, the Charanachitta family's core hotel firm, plans to set up a new hotel management company to supervise its hotels in both local and international markets in the second quarter of 2010. The new company will manage the hotels for Amari Estate as well.
"We are working on this plan. We will offer three hotel brands: five-, four-, and three-star hotels.
"We expect to sign management contracts for at least three or four hotels in the first year of operation," said Mr Yuthachai.
Amari Co also plans to take over hotel management companies in neighbouring countries next year to pave the way for the Amari brand to go overseas, he said.
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