Taiwanese developer Fragrant Real Estate Group is expanding its investments in Thailand with plans to spend Bt4 billion over the next five years to capitalise on business opportunities in the Kingdom.

Yesterday the company kicked off its new plan by launching a Bt1.4-billion condominium project called Prime 11 at Bangkok's Sukhumvit 11, its second development in Thailand.

The company's chairman, Lu Cheng-Yuan, said Thailand had high potential for the group. The group previously invested US$10 million (Bt374 million) in a development called Hollywood Plaza in China.

Thailand is the company's second destination for overseas expansion, Lu Cheng-Yuan said. Fragrant Real Estate is the largest real-estate developer in Taiwan. The group has more than 30 years' experience during which it has built Bt30 billion worth of properties in Taiwan. The group has undertaken a variety of projects, including office blocks, department stores, condominiums, hotels and resorts.

The company began its expansion into Thailand last year by establishing Fragrant Park Co Ltd with registered capital of Bt25 million. Fragrant Park is a joint-venture firm in which it holds a 49-per-cent stake. The remaining 51 per cent is held by a Thai business, which the company did not identify.

Fragrant Park's first condominium project, the Bt250-million Fragrant 71 complex, was started on Sukhumvit 71 last year. The project, which will be completed in the last quarter of this year, is expected to generate revenue of Bt250 million by the end of the year.

The group also established Fragrant Real Estate Development Group Ltd with registered capital of Bt105 million earlier this year in order to develop Prime 11. It is now open for pre-sales and construction will start next year.

Lu Cheng-Yuan said that the group planned to spend between Bt700 million and Bt800 million a year of its Bt4-billion budget for Thai developments.

If its condominium projects take off, Lu Cheng-Yuan said the group would diversify into other properties, including serviced apartments, hotels and shopping centres. However, first the group intends to build up total assets in Thailand of between Bt5 billion and Bt7 billion in Thailand, a process that it expects to take five years.

"We believe Thailand is a potential country in Southeast Asia for our investment, however, we are concerned about the alien business law and the nominees law in Thailand. These need to be clearly defined before we expand our other businesses in the country," he said.

James Duan, president of Fragrant Real Estate Development Group, said after construction had begun on Prime 11 next year, the company planned to increase its registered capital from Bt105 million to Bt400 million. This will enable the company to start on other high-end condominium projects in the next year.

Fragrant Park also intends to increase its registered capital from Bt25 million to Bt100 million to develop another condominium project next year focusing on the middle market, Duan said.

He said the company's policy in Thailand had two focuses. The brand name Prime will focus on the high-end market, while the middle bracket of the condominium market will be developed under the brand name Fragrant.

The group will invest up to Bt1.2 billion to develop its two new condominium projects in the next year. Half of this sum will come from increasing its registered capital and its cash flow for its two firms, while the other half will be borrowed from commercial banks, Duan said.

Somluck Srimalee

The Nation