Hup Soon Launches Bangkok Condo

Source : The Business Times, November 24, 2008

The Surawongse will be sold at an average 120,000 baht (S$5,232) per square metre

CATALIST-listed Hup Soon Global Corporation will launch its 52-unit luxury condominium project in downtown Bangkok this Friday.

The distributor for automotive products and agriculture equipment said that The Surawongse will be sold at an average 120,000 baht (S$5,232) per square metre. Sizes of units range from 43 to 72 sq m.

If all units are sold, the development should reap 400 million baht, said Timothy Yong, Hup Hoon executive director, or double its construction cost of about 200 million baht.

Hup Soon has roped in a partner Chewathai Limited (CWT) which will put up 84 million baht in cash with this going towards paying the construction costs. The shortfall will be funded by bank borrowings.

'The debt/equity ratio of CHS will be kept low, and this will allow it to ride out any uncertainties in the Thai property market,' he said.

CWT is a joint venture between Trans Equatorial Engineering, a wholly owned subsidiary of Singapore-listed construction/property play TEE International Limited, and Chartchewa Co Ltd, an established player in the Thai real estate market.

Already, 10 per cent of the project has been sold to staff, he said.

Construction is expected to take about 24 months and Hup Soon is confident that the project will sell well despite the country's volatile political situation and global economic crisis.

'Notwithstanding the negative sentiment caused by the domestic political situation and global credit tightening, The Surawongse . . . is a niche project aimed at local and overseas investors,' said Timothy Chia, Hup Soon deputy chairman.

'We are hoping to target the large number of working expatriates who require accommodation in the Silom and Surawongse area, and people who have lived in the Surawongse area for a long time and want to look for additional housing space for their extended families,' he said.

Mr Yong added that investors looking for an alternative investment in the current climate might see the project as a yield play.

'It's not a big amount, those with spare change might see it as an alternative asset investment and yield play,' he said, adding that he thinks that the potential rent could yield about 6 per cent.