SET-listed developer Raimon Land Plc (RML) plans to invest 5.3 billion baht in developing an office tower on Phloenchit Road, spending another 4.8 billion to launch three new luxury residential projects in the Silom and Sathon areas during 2017-18.

Chief executive Lee Chye Cheng said the Bangkok office sector is one of the most promising markets because of strong demand for office space, especially Grade A.

The occupancy rate of the overall office market is higher than last year's 90%.

"The investment opportunity in the office sector is attractive," Mr Lee said. "It can generate recurring income to reduce volatility and stabilise cash flow for the company in the long run. We expect to have an even split of income from residential sales and office rents in the future."

Last November, Raimon Land signed a 30-year lease contract starting from 2022 to rent a six-rai plot on Phloenchit Road opposite Central Embassy to develop a Grade A office building with a total lettable area of 70,000-80,000 square metres.

The total investment of 5.3 billion baht will comprise construction cost of 2 billion baht and rent of 3.3 billion. Construction will start in April next year as the existing tenant's lease contract expires at the end of 2017. It is scheduled to take four years to complete.

Raimon Land has an eight-storey office tower for rent, Space 48, with a lettable area of 2,200 sq m and 94% occupancy last year. It is located on Ratchadaphisek Road near Sutthisan MRT station and was started four years ago.

In 2016 the company recorded 851 million baht in net profit, down 5.6% from 2015, on revenue of 5.2 billion baht, up slightly from 5.14 billion baht a year before. Of total revenue, income from non-residential business was 133 million baht, accounting for 2.5%.

Chief financial officer Sataporn Amornvorapak said the company expects revenue to dip 10-15% this year as its completed projects with remaining units for sale and those ready to transfer were difficult to sell.

A majority of the completed, unsold units are at Unixx, a condo project in Pattaya with 1.17 billion baht worth of remaining units, some 35% of its total completed unsold units worth 3.33 billion.

After not launching any projects since June 2015, Raimon Land will resume with two projects this year. One is Mews Yen Akat, a semi-detached house project with eight pre-built units worth 499 million baht on Yen Akat Soi 2 in the Sathon area.

The other is The Loft Silom, a 37-storey condo project worth 3.2 billion baht with 268 units priced above 200,000 baht per sq m. It is located on a two-rai plot on Soi Pramuan.

In 2018, Raimon Land plans to launch a high-end single-house project with 20-25 units on a 3.5-rai plot on Soi Prasath Suk in the Sathon area worth 1.1 billion baht.

"We are very selective in choosing plots to ensure a good margin, taking our time to do a comprehensive market study and project design before a launch," said Mr Lee.

"We will remain focused on this strategy amid a slowdown in the property market and the economy."

RML shares closed yesterday on the SET at 1.40 baht, down two satang, in trade worth 9.87 million baht.