By Baupan Annada
BELIEVING in Koh Samui’s potential as a high-end tourism market, the Central Plaza Hotel Plc launched an initial public offering of the Centara Hotels and Resorts Leasehold Property Fund, hoping to raise Bt3.2-billion capital for business expansion.
The IPO selling period was scheduled last Sept. 8-18. Units will eventually be listed on the Stock Exchange of Thailand.
The Fund, managed by Kasikorn Asset Management, will take a 30-year lease of the five-star Centara Grand Beach Resort Samui, owned by SET-listed Central Plaza Hotel. The minimum investment for the fund was Bt10,000.
Kemachart Suwanagul, the head of property fund management for Kasikorn Asset Management, said rental revenues were guaranteed for the first four years with a yearly average yield of nine percent.
From March 2009 the fund will pay quarterly dividends set at a minimum of 90 percent of net profits. Over the 30-year lease period, the internal rate of return is projected at 11-12 percent yearly.
The five-star, 202-room Centara Grand Beach Resort Samui has been open for the past 13 years and is located on a 25-rai plot in Chaweng Beach, the most expensive land on the resort island. It completed renovations last year
Central Plaza, one of the country’s largest hotel operators with 12 hotels and 2,799 rooms under its management, will continue to manage the hotel during the lease. It will also invest 25-33 percent in the property fund, with the rest held by general investors.
Ronnachit Mahattanapreut, senior vice president of finance for Central Plaza, said the company planned to bring three hotels in Krabi and Phuket into the Centara Hotels & Resorts Leasehold Property Fund within the next two to three years.
He said the size of the fund was forecast to rise to Bt10 billion.
The Centara Grand Beach Resort Samui had an occupancy rate of 79 percent in the first half, up from 72-73 percent in the same period last year. Occupancy rate for the full year are projected at 79 percent, up from 67-68 percent in 2007, when the hotel was under renovation. Over the past six years, Mr. Ronnachit said average occupancy has been between 75 percent and 80 percent.
The hotel forecasts that revenues this year will be Bt530 million, up from Bt450 million last year. Room revenues account for 60 percent of total revenue, with food and beverages supplying 30 percent and other services the rest.
Ronnachit said Central Plaza expects tourist revenues to rise, with bookings for October at 80 percent. Around 70 percent of the Samui hotel’s guests are from Europe and the rest from Asia. Average stay is 7.2 days.
He added that Central Plaza’s projected total revenue this year is Bt8billion, up 20 percent from last year, thanks to new revenues from the Centara Grand and Bangkok Convention Centre at Central World.
Growth is forecast to continue next year at 20 percent, with revenues rising to Bt9billion, thanks to new hotels in Pattaya and the Maldives. Central Plaza reported second-quarter profit of Bt30 million, up by 58 percent from the same period last year.—B.A.
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