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Thailand: Opportunity zone
A new wave of retail investment is taking over the Eastern Seaboard with local and Bangkok operators jumping on the bandwagon of the government’s Eastern Economic Corridor (EEC) initiative.
The EEC, spanning a combined 30,000 rai in Chon Buri, Rayong and Chachoengsao, is intended as a special zone for investment in 10 targeted industries promoted as clusters by the government. The state has pledged to pour in over 400 billion baht for infrastructure investment to attract investors.
The development is expected to bring more people to the region, urbanise the area and create new communities, drawing in investment from retailers to nearby cities.
Five major retail operators are interested in the EEC, including Laemthong Group (now changed to My Passion and Inspiration Co); Siam Retail Development Co, a retail arm of Land and House Group; Saha Group, the country’s leading consumer product conglomerate; and Robinson Department Store.
Total investments amount to more than 14 billion baht to develop new projects and extend existing ones in Rayong and Chon Buri over the next five years.
“EEC development will pave the way for countless business opportunities to catalyse urbanisation in Rayong in the near future,” says Pattamabhorn Nokhong, chief executive of My Passion and Inspiration, the operator of Passion shopping mall (formerly Laemthong Department Store).
Rayong will be attractive for investors because of new facilities such as the Bangkok-Chon Buri-Rayong high-speed train and the construction of the Chon Buri-Pattaya-Map Ta Phut motorway. It is also home to popular tourist attractions like Koh Samet and Mae Ramphung beach, which bring over 4 million tourists to the city each year.
“Rayong has substantial consumer purchasing power because of the city’s vast industrial worker population. This community has grown since my father opened the department store 21 years ago,” Ms Pattamabhorn says.
Proximity to industrial estates and a booming service sector led Rayong to enjoy average household income of 30,300 baht per month in 2015, beating the national average of 26,915 baht, according to the National Statistical Office. Chon Buri and Chachoengsao have similar measures of household income at 27,257 and 27,555 baht monthly, respectively.
With the expected influx of businessmen, workers and foreign tourists in Rayong, My Passion plans to allocate 5 billion baht to business expansion over the next five years.
The company is in the process of conducting a feasibility study to develop a multi-purpose complex on a 10-rai plot. The project will comprise office buildings, a hotel and a community mall.
“I believe in Rayong’s potential. I have seen incredible growth in the province over the past two decades, from the opening of new factories and industrial parks to a surge of tourists and foreign investors,” Ms Pattamabhorn says.
As Passion mall is expected to be a station for the new train project in the EEC, the company plans on spending 100 million baht to renovate its food and plaza zone. Renovation consists of updating the complex’s facilities as well as bringing in trendy international brand name stores to accommodate foreign customers.
“The push to develop transport infrastructure in Chon Buri and Rayong will create plenty of opportunities for us,” she said. My Passion and Inspiration Co plans to prepare new strategies, upgrade employee skills and services to international levels, and respond proactively to crises, said Ms Pattamabhorn.
This September, the company is scheduled to open a Holiday Inn and Suites hotel with 288 rooms in the heart of Rayong city.
Retail and consumer product companies from Bangkok are also expanding their businesses to Rayong and Chon Buri to add to existing retail operations.
Pakorn Partanapat, chief operating officer at Central Pattana Plc (CPN), a SET-listed property and retail developer under Central Group of Companies, says Tos Chirathivat, chief executive of Central Group, issued a policy for extensive research about business opportunities in the EEC zone.
CPN saw business potential in the Eastern Seaboard, opening Central Plaza Rayong in 2015. The province is Thailand’s biggest industrial hub, with 19 industrial estates, including the Eastern Seaboard Industrial Estate and Map Ta Phut Industrial Estate, and over 1,900 plants.
These estates promote the development of transport and logistics systems in the eastern provinces, making them the country’s gateway to Cambodia and Vietnam.
CPN operates four Central Plaza projects in the region: two in Pattaya and one each in Chon Buri and Rayong.
“If customer traffic sharply increases and our malls appear more crowded, we will extend retail spaces at Central Plazas in the region,” Mr Pakorn says.
Robinson is developing its third branch in Chon Buri and starting construction on a Robinson Lifestyle project in Phanat Nikhom district. Investment for these projects is estimated to be 800 million to 1 billion baht. Currently, there are two Robinson department stores in downtown Chon Buri and a Pacific Park retail project in Sri Racha district.
Siam Retail Development Co has turned its focus to building a retail complex in Pattaya.
“Pattaya is our priority investment destination to expand business because of the government’s planned transport facilities in the eastern region, including for EEC development, which should strengthen economic networks in the area,” says Prasert Sriuranpong, president of Siam Retail Development. Its other retail facilities include Fashion Island and Terminal 21 malls in Bangkok.
Pattaya is surrounded by industrial cities. The EEC blueprint calls for a high-speed train linking Bangkok to Rayong, connecting Don Mueang and Suvarnabhumi airports in the former with U-tapao airport in the latter.
“Pattaya is one of Thailand’s top three tourist destinations. The city never sleeps, even when the economy is stagnant,” Mr Prasert says. Pattaya is popular with Chinese tourists currently, following the boom and bust cycles of European and Russian visitors.
Siam Retail Development is spending 7.5 billion baht to develop a Terminal 21 complex on a 33-rai plot in northern Pattaya. The project includes a Grande Centre Point hotel with 400 rooms adjacent to the mall. The 180,000-square-metre mall is scheduled to open in the fourth quarter of 2018.
Thanong Srichit, president at Saha Pathana Inter-Holding Plc, says Saha Group is allocating 500 million baht to develop the second phase of J Park Community Mall in Chon Buri’s Sri Racha district. J Park has been rumoured as a potential station, along with Passion mall in Rayong, for the planned high-speed train route to the Eastern Seaboard. The mall takes up 20 rai of land out of the 400 rai owned by Saha Group in the area.
The second phase of J Park Community Mall will cover 10,000 sq m and provide restaurants, including izakaya-style Japanese food as well as street food from other vendors.
There are more than 10,000 Japanese expats living and working in Sri Racha district.
The group also plans to develop and upgrade facilities at its Sriracha Industrial Park, which covers over 1,600 rai.
Saha Group and Tokyu of Japan have agreed to spend about 800 million baht to build a 16-storey, 180-room serviced apartment block in Sri Racha aimed at single Japanese customers, investors and residents expected to work for various EEC projects.
CPN chief Pakorn says Central Group has studied investment opportunities in EEC. TAWATCHAI KEMGUMNERD
Source: http://www.bangkokpost.com/business/news/1280003/opportunity-zone