Bangkok Land on verge of big deal
BANGKOK Land is on the verge of pulling off a coup that could resurrect its moribund satellite city on the outskirts of the Thai capital.
The government is likely to make a decision next Tuesday on whether the Asian Games can be based in Muang Thong Thani, an unpopular site.
Although the deal is a coup for Bangkok Land's ambitious chief executive Anant Kanjanapas, it also appears to indirectly confirm that the 640-hectare project in the northern outskirts of the capital has been a slow seller. The Hong Kong-style city has so far failed to attract many customers, perhaps because Bangkok is not yet ready for close-packed high-rise living some distance from the city centre.
Without achieving a critical mass of buyers, Muang Thong Thani has been described by at least one property analyst as 'a dreadful place, lacking character and soul. The fact that no one's living there doesn't help'.
Nevertheless, if it can attract the Asian Games, Bangkok Land can divert from the negative aspects the project, guarantee better occupancy and improve transport links.
However, the deal is that Bangkok Land will invest some three billion baht (about HK$930 million) in a 12 billion baht sports complex on 680 acres of Muang Thong Thani. Construction is scheduled to start next month.
The company will also set aside enough land to build an extension to an important north-south inner-city motorway through the new town.
After the Games, the government will retain a fifth of the complex and receive five per cent in revenue from the sports operations.
Property analysts noted that Bangkok Land agreed to make 20,000 apartments of its existing core project, 13 billion baht, 26,000 unit Popular Condominiums, available to athletes during the Games.
Clearly, this is an admission that Bangkok Land has not been able to sell, or at least transfer, the bulk of these properties.
One property analyst noted that at the end of September: 'Bangkok Land had already booked 90 per cent of this project as revenue but only received 25 to 30 per cent of the value. We suspect this situation is repeated for a number of other projects in the 40 billion baht estate.' Although this tacit admission damages the net asset value of Bangkok Land, typically valued by brokers at around the current trading price of 60 baht, some previously skeptical houses are now promoting the company as a good scrip to trade in on the back of its likely 'sporting' boost.
