Last March, the company inked a deal to buy the 18-rai plot of land in Pattaya. However, it can lay hands on the land only after the leasing contract between Montien and the landlord expires five years from now.

"We're drafting a plan to develop a new retail and real-estate complex in Pattaya, which will include a shopping complex, 500-room hotel and condominium," said Khemapat Nissaisorakarn, senior executive vice president for business development.

"We've finished the designing process of the complex in Pattaya, but construction will begin in 2012, when the lease with the operator of the Montien Hotel expires," he said, adding that it would take about three years to build.

Khemapat said the company was also negotiating for the possibility of acquiring or forming a joint venture with the operator of a Bangkok shopping complex but that such a deal had yet to be finalised.

President and CEO Suvait Theeravachirakul said the real-estate project in Pattaya would be another milestone for MBK, together with expansion of other real-estate projects set to minimise its business risk and dependency on the MBK shopping complex at the Pathum Wan Intersection.

"The leasing contract on the land plot, currently operated by MBK, will expire in the next six years, and what we have planned right now is to expand our business portfolio to other diversified projects, including hotels and housing-estate developments, designed to minimise business risk," said Suvait.

MBK's core business is property development through the management of rental space in MBK Centre, the shopping complex. The average occupancy rate for the past three years has been 99-100 per cent of total available rental space.

"We'll invest about Bt1 billion this year on further developments of our ongoing projects. These include a 200-room resort hotel on 150 rai of land on Koh Samui; a housing estate, including golf course and clubhouse, on 400 rai in Phuket; and another housing estate and golf course on 800 rai in Pathum Thani," said Suvait.

He said the company expected to increase the contribution of its hotel operations from the current 15 per cent of group revenues to more than 25 per cent in the next five years. The contribution from real estate and housing projects will also jump from 5 per cent currently to 15 per cent in the same period.

Suvait said MBK planned to issue debentures worth about Bt5 billion in the next three months, in order to mobilise funds for paying debts and future expansion.

Khemapat said MBK Centre had witnessed a decline in local shoppers, who were quite conscious about the recent unrest, including the New Year Eve's blasts and economic and political uncertainties.

"The number of local visitors dropped almost 5 per cent in January compared with the same month last year, because Thai shoppers are quite aware and cautious about bomb attacks. However, the number of foreign arrivals is still good, as they feel less panicky about the incident," said Khemapat.

"We plan to increase the proportion of foreign visitors to the complex from the current 20 per cent to more than 30 per cent in the near future," he said.

Khemapat said the company had already invested Bt60 million to renovate a 2,800-square-metre retail space on the fourth floor of MBK Centre and create a new "MBK Money Park" zone. The zone will consist of leading commercial banks: Bangkok Bank, Krungthai Bank, Kasikornbank, Bank Thai, Thanachart Bank, Siam Commercial Bank and Land and House Bank.

In addition, the company has also renovated more than 4,500 square metres of retail space on the sixth floor as the country's largest souvenir zone, which will sell many Thai products, including handmade and One Tambon One Product items targeted at foreign visitors.

The company also launched a debit card, the MBK Member Card, to its core target customers aged 17-34. This age group represents about 70 per cent of total shoppers in MBK Centre. 

Kwanchai Rungfapaisarn

The Nation