|By Somporn Thapanachai, Bangkok Post,
ThailandMcClatchy-Tribune Business News
Oct. 10, 2006 - A low-profile luxury apartment operator, Songland Ltd, plans to invest around five billion baht to develop two luxury hotels in Phuket next year, according to managing director Pornphan Suksomboonwong.
Established in 1987 and now boasting 200 million baht in registered capital, the company owns more than 40 apartments in Baan Chao Praya, Pimarn Chao Praya and Pimarn Mansion in Sathorn Soi 7. Most are large units with two to four bedrooms that fetch rents from 100,000 baht a unit.
Earlier this year, the company expanded into real estate development with a small townhouse project, Baan Lalanah in the Suan Luang area, and the Baan Lalanah detached house and townhouse estate in South Pattaya. Songland expects to close sales of both projects next year.
The Pattaya project has nine single houses, six townhouses and six shophouses. Songland wants to finish building the units before putting them on sale.
Ms Pornphan said the company would focus on developing hospitality projects in Phuket next year. The first, located on a 180-rai beachfront plot on Mai Kao beach, would be a 250-300 room five-star hotel with luxury villas priced from 30 million to 70 million baht for sale to foreign buyers.
The development will cost about four billion baht and would be jointly financed by a hotel chain -- likely to be Grand Hyatt -- and other investors recruited by Songland or the hotel chain.
"Our land has an 80-rai natural water reservoir so we will not have a problem with water supply. Some of our villas will have lake views while some will have beach views," said Ms Pornphan.
The second project is a four-star hotel on a 40-rai plot on Nai Yang beach with an investment of about 600 million to one billion baht. The company is in talks with the Sheraton group to have a 200-room hotel in this location.
Ms Pornphan said the first project would likely begin next year while the second project would depend on the cashflow left from developing the first one.
She said Phuket's property market, with the exception of the period immediately after the tsunami, has always been good for investment, so the company had started accumulating land on the island a few years ago.
The company has two other sites on Surin and Kamala beaches but has not yet decided how to develop them.
Songland embarked on the property business through apartment management and later expanded into development. Ms Pornphan said the company would concentrate on high-end markets with Thai and foreign buyers in the future.
The company has faced difficulties with lower-end buyers at its Baan Lalanah project in Suan Luang, comprised of 38 townhouses priced from 2.5 million to 3.5 million baht each. Ms Pornphan said buyers in this price range had many factors to consider before making decisions and often sought changes.
"We are more specialised in working with foreign or Thai buyers who want to buy products for investment," she said.
The company also has a subsidiary, Songtique Co, which is an antique trading firm with showrooms at River City, Chatuchak market and Phuket.
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