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Singha Estate changes development partners

Switch to Daiwa House from HK Land

An artist's perspective of Eyse Sukhumvit 43 condo project. It will be located on two rai on Sukhumvit Soi 43, comprising two seven-storey buildings and 107 units.

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SET-listed property firm Singha Estate Plc (S) has shifted to partner with Japanese contractor, Daiwa House Industry Co, for residential developments after joining Hong Kong-based investment firm Hongkong Land Ltd last year in a condominium project.

Chief executive Naris Cheyklin said the partnership with Daiwa House will help Singha Estate scale up investment in the future to develop larger projects like mixed-use facilities.

"Our financial status is strong but having an overseas investor can support large-scale investments in the future," he said.

Next year Singha Estate plans to spend 8 billion baht to acquire at least four plots of land for development of new property projects, up from 6 billion baht allotted for this year. Of the amount, it already spent 3 billion baht.

"This will be a long-term partnership," said Mr Naris.

"Daiwa House has experience with building low-rise house and high-end condos with prefabricated construction techniques that we can learn from."

As labour wages in the near future will likely rise to 500 baht a day, which will increase construction costs, prefabricated construction will help ease that risk, he said.

The move will also shorten construction time, which also reduces financial cost.

Singha Estate yesterday announced a partnership with Daiwa House Industry in Eyse Sukhumvit 43, a low-rise condo project worth 2 billion baht, after six months of discussion in the joint venture.

In the partnership with Daiwa, the construction time for the project will be 10% shorter or a few months less than two years.

Last year Singha Estate had a joint venture with Hongkong Land in a luxury condo project, The Esse Sukhumvit 36, worth 6.5 billion baht near Sukhumvit Soi 36, which was launched late last year.

However, Singha Estate will likely join with the Hong Kong property investment group in only one project as the latter's business style does not mesh with Singh Estate's.

"Hongkong Land is a very large firm with an aggressive style that may not match ours," he said.

"The Japanese partner is quite cautious, with slower decision-making."

After partnering with Singha Estate last year, Hongkong Land partnered with SET-listed residential developer Property Perfect Plc in May 2018 to develop two luxury single detached housing projects together worth 10 billion baht, due to be launched this year.

Robert Wong, chief executive of Hongkong Land, a member of the Jardine Matheson Group, said in May during a visit to Bangkok the company is eyeing a high-end office tower development through a joint venture with Central Pattana Plc (CPN), with holdings at 49% and 51%, respectively.

Both are designing a high-end commercial property project on a 25-rai plot on Wireless Road that was previously owned by the UK embassy, which they purchased for £420 million (17.8 billion baht) from the British government early this year.

S shares closed yesterday on the SET at 3.48 baht, up six satang, in trade worth 145 million baht.

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