|B3bn Thai-Malaysian distribution centre planned|
|Wednesday, 25 July 2012 13:36|
A 3-billion-baht plan to develop a distribution centre on a 29-rai site near RCA has been drawn up by AEC Property Development Co Ltd.
The Thai-Malaysian joint venture developer expects the investment will break even within six years.
Chairman Thanongsak Hutanuwat said the supply of new retail space in Bangkok has increased significantly in recent years, and retailers need their back-end operations near the city.
At the same time, there are a large number of small and medium-sized enterprises (SMEs) _ 1.8 million in all _ with 10,000 of these accounting for half of gross domestic consumption, he said.
These factors have resulted in the company's decision to build a distribution centre.
"We've talked with Malaysian investors for a couple of years about this investment, but they were not confident about the Thai political situation," said Mr Thanongsak.
"Now they're acting, as the situation is better, more stable."
The firm's Malaysian partners include investors and executives in various sectors including property, media, building materials and investment firms.
AEC Property Development will spend 1 billion baht on the plot, which it leased last November for 30 years from Sap Samphan Co Ltd.
Sap Samphan is owned by the Boonbongkarn family, a major landlord on Chaturathit Road.
Another 1 billion baht will be spent to construct the distribution centre, which will be called Show DC.
The centre will have two buildings with a gross leasing area of 95,000 square metres. Shop sizes will range from 40 to 4,000 sq m.
Long-term leases will cost 55,000 to 75,000 baht per sq m for a 28-year period or 50-100 baht/sq m as a monthly fee.
Construction will start in September and be completed next year, and the company expects 90% of the space will be occupied by then.
The company is targeting annual revenue of 600-700 million baht from the centre.