Uthai Uthaisangsuk, president of Sansiri. (Photo: Sansiri)

Selling shares of US-based lifestyle hotel Standard International will drive net profit to reach a new high this year for SET-listed developer Sansiri.

Uthai Uthaisangsuk, president of Sansiri, said net profit this year is anticipated to exceed the 6.06 billion baht recorded last year, after registering 2.7 billion baht in the first half.

The company already reported a new high in net profit for two consecutive years.

Last week, the company announced an agreement to sell shares of US-based lifestyle hotel Standard International to the Hyatt group for US$355 million.

Mr Uthai said Hyatt was the only company Sansiri had been in talks with since March and it continued working with them for 4-6 months.

Of the total purchase value, $150 million will be an upfront payment with due date in September or early October.

The remaining $205 million will be gradually paid based on the performance of hotels in the future.

Mr Uthai said some of the profit gained from this deal will help reduce its debt burden and improve cash flow, including reducing the gearing ratio from 1.62 to 1.5 by the end of the year, while the remainder will be used for other investments.

He said since 2017 Sansiri has established investment in Standard International as a new strategy with the potential to grow as a large brand. He said 30 hotels in the portfolio should be enough to break-even for hotel investment.

"Hyatt contacted Sansiri at the right time when Standard had expanded to 21 hotels with roughly 2,000 keys, including in New York, Manhattan and Miami," he said.

The existing properties will be immediately added to Hyatt's portfolio, along with future contracts that will be made with Standard.

As Hyatt never had any lifestyle-branded hotels in its portfolio, this acquisition will help drive Sansiri's revenue in coming years, said Mr Uthai.

Standard has also been recognised as a hotel with a high revenue from food and beverage sales.

Sansiri would still own four hotels, including three in Thailand and one in New York, under a new subsidiary brand named The Manner.

Mr Uthai said the group currently does not have a plan to invest in new hotels, but will instead focus on its core business, which is residential development.

If there's an opportunity to invest in new hotels, those projects should be able to support Sansiri's residential properties in each location.

Looking at the second half, he said Sansiri is maintaining the same target of presales and transfers at 50 billion and 43 billion baht, respectively.