U City will invest 3 billion baht to transform the Old Customs House on Bangkok's riverfront into a luxury hotel.

SET-listed real estate investment firm U City Plc, a subsidiary of BTS Group Holdings Plc, will spend 3 billion baht to develop a luxury hotel on the Treasury Department's riverside plot in Bang Rak where the Old Customs House formerly operated.

U City chief executive Piyaporn Phanachet said the company will lead the development of the project, which will include a restoration of the heritage buildings and construction of a new building with a total area of 15,900 square metres to transform the property into an upscale hotel.

"We will focus on a development concept that aims to preserve the legacy of the 130-year-old historic building and reflects the charm of its traditional architecture," Ms Piyaporn said in a release.

U City yesterday signed a contract with the Treasury Department to develop the historical landmark, also known as Rong Phasi Roi Chak Sam, into a luxury riverside hotel to open in 2025.

The development contract, which covers 30 years of a lease agreement, was signed by U City director Kavin Kanjanapas on behalf of a joint venture with Amanresorts Services Ltd and Silverlink Resorts Ltd.

According to the agreement, the joint venture is obligated to pay the rental fee to the Treasury Department at 1.6 billion baht in total.

The hotel will offer comprehensive facilities such as a function room, meeting rooms and restaurants. The project is aimed at enhancing tourism along the banks of the Chao Phraya River and in Bang Rak district.

The area of Rong Phasi Roi Chak Sam features heritage buildings dating back to 1888. The neoclassical building, which once served as the customs house, is three storeys high with a four-storey-high central hallway.

The building was a recognisable landmark on the riverbank for a century.

After the contract signing, U City will cooperate with archaeological experts and the Fine Arts Department to begin the excavation and cataloguing of archaeological remains.

The excavation process, restoration and construction of the new building are expected to take six years before hotel operations begin.

"We recognise the importance of the historical and cultural value which are inherited with Rong Phasi Roi Chak Sam," Ms Piyaporn said. "We are ready to start the restoration works and develop the prestige site."