Thai real estate giant bets big on tourism rebound with $ 3.2 billion growth plan
Stuffed with cash from one of Thailand’s largest IPOs, the CEO of Asset World Corp. Wallapa Traisorat is building new hotels and renovating tourist sites in the hope of a post-pandemic boom.
With Covid-19 always keeps foreign tourists away from pristine beaches and bustling cities in Thailand, leaving more than 80% of hotel rooms unoccupied, one would expect the CEO of one of the biggest developers of Thailand. The country’s hotels, businesses and offices are falling back. Instead, Wallapa Traisorat, CEO of Asset World Corp. (AWC), has drawn up a five-year growth plan of 100 billion baht ($ 3.2 billion) to position its business for a post-pandemic tourism boom. âIt’s a short-term impact that we’re facing right now,â she says. “We see tremendous growth and strength potential in Thai tourism.”
Wallapa’s optimism is backed by financial strength and vision. On the one hand, AWC is a family affair. The president is his father, Charoen Sirivadhanabhakdi, who is No. 3 out of Thailand’s 50 richest this year, with a net worth of $ 12.7 billion. The rest of the board includes her mother, who is vice president, and her husband, who is a director. Together, the entities controlled by the family own the lion’s share of the business. Wallapa is also one of a handful of female CEOs at the head of a large Thai company.
On the other hand, AWC is cashed in, having made a $ 1.6 billion IPO in October 2019, just months before the pandemic hit. Led by Wallapa, it was the largest listing ever by a real estate company on the Thailand Stock Exchange. The company now has a market valuation of around 146 billion baht, with shares trading at around 4.5 baht, down from the offering price of 6 baht.
Since the IPO, Wallapa has further boosted AWC’s funding, saying the company has also secured 50 billion baht of lines of credit from two Thai banks, including 30 billion baht from the Siam Commercial Bank, for prepare for “growth and investment”. In its first quarter report, AWC had assets valued at 72 billion baht, plus cash and receivables of nearly 1 billion baht, but only 44 billion baht in long-term debt.
Having healthy finances helped AWC weather the 83% drop in tourist arrivals last year, from an all-time high of around 40 million in 2019. Revenue fell 54% in 2020 to 6.1 billion baht, pushing the business into the red, and dropped 56 more. % year on year in the first quarter, with a net loss of 594 million baht.
However, these figures did not deter Wallapa from planning four new hotels with 1,600 rooms, in addition to AWC’s 17 hotels with nearly 5,000 rooms. In February, it also acquired the 287-room Sigma Jomtien Pattaya Hotel for 550 million baht.
However, AWC’s most ambitious projects reflect Wallapa’s experience in architecture and land use planning. About 30 billion baht will be spent on redeveloping Bangkok’s historic Chinatown and waterfront areas as well as making Pattaya, a bad-name beach town south of the Thai capital, a conference and exhibition destination.
“We see tremendous growth and strength potential in Thai tourism.”
âWe are looking to create an integrated lifestyle real estate group, and Thailand is our goal,â Wallapa, 47, said in a rare video call interview from his Bangkok office. “This is the strategy to prepare AWC for future growth.” The hotels generated 60% of the company’s revenue before the pandemic and include seven properties of the Imperial Hotel group that Charoen bought in 1994 as well as Marriott Marquis Queen’s Park, The Athenee Hotel and Okura Prestige in Bangkok.
Wallapa expects the hospitality industry to remain a key growth engine and last October announced AWC’s plan to build four new properties, which will be operated by Marriott International, including a Ritz-Carlton Reserve and the first hotel. Autograph Collection in Thailand.
“They are one of the behemoths of the [Thai] industry, âsays Nikhom Jensiriratanakorn, director of Bangkok-based hotel consultancy Horwath HTL. âThey are growing, using their size strategically and with all their capital. “
In a May report, he predicts Bangkok will lead a rebound in Thailand’s hospitality industry with a V-shaped recovery from the second half of 2022. Phuket will follow suit in 2023, once travel restrictions are over. fully waived and reciprocal travel arrangements will be in place. with key markets such as China, Japan, Singapore and South Korea.
Tthe second of five children, Wallapa accompanied his parents while growing up in Thailand on vacations that inevitably focused on visits to family businesses, which then included mostly breweries and distilleries (Charoen’s Thai Beverage is the maker of the popular beer Chang).
She remembers her father buying properties with no development plans imminent, creating a huge bank of land that Wallapa would work with decades later. This is notably a privileged site overlooking the sea where Banyan Tree Krabi opened in October.
After graduating in Architecture from Silpakorn University in Bangkok, Wallapa traveled to the UK where she did her MA in Regional and Urban Planning at the London School of Economics, followed by a MA in Philosophy in Land Economics. from the University of Cambridge. She started her career as a financial analyst at Merrill Lynch in Hong Kong in 1999 and married her high school sweetheart Soammaphat Traisorat the following year.
She joined her father’s diverse TCC group in 2001 to focus on her real estate-related businesses, the selection of which was merged to form AWC in 2018. The Traisorats have five children and Soammaphat, the former CEO of the TCC’s former joint venture with CapitaLand of Singapore, is a director on the board of AWC.
âIt’s an interesting transition,â says Bill Barnett, Managing Director of C9 Hotelworks, a Thailand-based hotel consultancy, noting that Wallapa is highly regarded for building a professional team and focusing on working with a select group. partners. âShe builds strong relationships. It’s a clear strategy, âhe says.
Unlike some large hotel owners in Thailand who have created their own hotel brands at home and expanded overseas, such as the Onyx and Amari hotels of the Italthai group and the Centara of the Central group, the AWC is focused particularly in Thailand, where its properties are operated by well-known regional and global companies. Hotel chains. âIt’s a lot more like big international hotel investment companies,â says Nikhom of Horwath HTL. âAWC tries to create an ecosystem where everyone benefits. “
FFollowing recent agreements with Marriott and Hyatt Hotels, Wallapa is planning new developments with Banyan Tree Hotels & Resorts, based in Singapore. While Banyan Tree has its own Thai resorts, it operates AWC properties in Krabi and Koh Samui. âAsset World has undergone many transformations,â says Ho Kwon Ping, founder and executive chairman of Banyan Tree, which has known the family for decades. “They want to be well known, not to the guests but to the investment community.”
After cleaning up AWC’s hotel division and renovating a large part of its retail businesses, Wallapa is focusing on three major urban redevelopment projects: a mixed-use development of 16.5 billion baht for the Bangkok’s Chinatown, an 8.1 billion baht bet on reinventing Pattaya, and a 5.8 billion baht extension of its sprawling open-air mall in Bangkok called Asian The Riverfront.
Bangkok’s colorful Chinatown, which dates back to the 18th century, has long been a magnet for tourists and is frequented by locals for its street food. Yet it lacks adequate parking, metro lines and tourist infrastructure, making it one of the most congested areas in the city. Wallapa plans to change that by developing an InterContinental hotel with a “very chic” Chinese boutique hotel, shops in restored heritage buildings, Bangkok’s largest underground mall, parking lots and warehouses, and a festival market.
While the project, named Woeng Nakhon Kasem after a traditional Chinese market that once stood there, has been criticized for its over-commercialization, Wallapa says, âWe believe that we can enrich the community, improve the culture and improve the quality of life. early history of Bangkok. The project is going to be the flagship and become the center of Chinatown. “
Transforming Pattaya – a former recreational playground for the US military during the Vietnam War with a shady reputation as a sex tourism destination – seems like a high-stakes gamble. But Wallappa doesn’t think so, saying she believes a new international airport proposed to be built by 2023 and planned rail links connecting Pattaya to Bangkok’s two airports, as well as a monorail that will pass right next to it. from the AWC center, could make it a global getaway like Phuket.
âPattaya has a lot of image issues,â says Jeremy O’Sullivan, research manager at real estate consultancy Savills in Thailand. “But it’s one of the only companies that can do something like this.” Horwath HTL’s Nikhom agrees, noting that while AWC has the money and could attract the right partners to revamp Pattaya, success will largely depend on how quickly public infrastructure grows. Thailand, after all, is known for its delays.
AWC’s third major project is to further expand its vast 12-acre Asian development. Wallapa plans to add an upscale Marriott hotel and residences as well as Bangkok’s tallest skyscraper. On board is legendary architect Adrian Smith, whose works include Shanghai’s Jin Mao Tower and Dubai’s Burj Khalifa Tower, who she says designed an iconic 100-story tower by the river.
While real estate professionals like O’Sullivan wonder if the pandemic will cause Thailand to repeat the sale of real estate seen during the Asian financial crisis of 1997, Wallapa remains cautious.
While AWC’s cash flow and deep pockets have attracted many bids for potential deals, prices have not fallen to levels it considers attractive. âNearly 200 projects have been offered to us,â Wallapa says, adding that most salespeople’s expectations are not based on reality. âIt’s hard to find the right opportunity,â she says. “It is still an uncertain time.”