Raimon asset value rises

New projects such as Southshore, 185 Rajadamri boost firm’s worth.

Ordinary people accumulate things, but successful ones accumulate wealth. So say wise investors.

In the world of real estate, that philosophy works equally well. The ability of developers to identify value and expand its worth is what makes them big winners.

Among the disciples of this rule is Raimon Land, which in a little more than five year, has leaped from – mid size developers to true juggernaut.

CEO Nigel Cornick says the firm is setting new benchmarks for the market with The River by the capital’s prime waterfront and Northpoint in Pattaya.

The Bangkok project on the Chao Phya River will have 511 luxury units housed inside its two towers, one rising 71 floors, and the other, 44 floors.

Raimon Land recently sold more than 49 percent of the project, worth more than Bt 4.3 billion. The total value of The River is a staggering Bt 8.6 billion.

Cornick says the company expects this year to be one where the company realises much of its income, which has been steadily growing the past few quarters.

The company’s success with The River comes on the back of a Bt 100- million showroom at the construction site that offers buyers a good idea of what they are buying.

”The moment they see the view from the river, that being of the spectacular skyline provided by the Shangri-La, Oriental and Royal Orchid Sheraton, as well as The Peninsula to its left, the decision to purchase becomes easy,” he notes.

Cornick admits, however, that the current global credit crisis has dampened may property markets, especially those that have formed massive bubbles, such as those in speculative US cities, notably in California, Florida and Nevada.

In such a nervous market place, buyers in the luxury market will now tend to buy from more trusted names, going for companies with tested track records and deep pockets.

Raimon Land is one of the names that should benefit from the current trend. In late 2006, the company locked in two major shareholders from Dubai and Kuwait, each buying a 24.9 –per-cent stake in the company.

As a result, Raimon Land’s board welcomed several new directors, including Talal Jassim al-Bahar, who will become its new chairman of the executive committee.

Other new faces were Werner Burger, president of Kuwait’s IFA Hotels and Resorts, and Richard Johnson, who heads Dubai-based Istithmar Real Estate, says Cornick.

“They will be active members of the new board”, says Cornick, who admits the Persian Gulf firms combined Bt2-billion investment in Raimon Land will bring needed capital and valuable know-how to its half-dozen projects.

Apart from The River, the funds will go to build the Bt4.8-billion Northpoint site and a 1.2-billion villa project in Phuket called The Heights.

But lately, Raimon Land has unveiled more luxury suites, including 185 Rajdamri, built on the former Cambodian Embassy site and worth Bt 8.8 billion.

There is also The Amalfi villa project, near the Amanpuri in Phuket and worth Bt 2.5 billion. The company is currently also finalising plans to launch its Bt4.4-billion Southshore project in Pattaya. A second condominium project in North Pattaya will be launched this year, worth about Bt3.5 billion.

These latest additions to its current crop of projects should boost Raimon Land’s value enormously, says Cornick, much more than when the Gulf shareholders bought into the firm at Bt 1.75 a share.

But for the meantime, because of the global turmoil in equities, Cornick says the company is selling at a discount of less that Bt 1. “Over time, when the markets stabilise, investors should begin to factor the new developments into the price.”

The value of luxury spaces has also moved up considerably since the Gulf partners bought half of the firm.

Initially, Raimon Land envisioned its 185 Rajdamri project to be able to sell for more than the record Bt 140,000 –a-square-metre level in 2006.

At the turn of the new year, sales at The River and Sukhothai Residences on Sathorn Road have broken the old records.

Sukhothai’s penthouses are fetching more than Bt300,000 a square metre, say the company’s top executives.

Even with the financial turmoil, the top-end luxury market continues to secure sales. “When the new government takes office,” says Cornick,” we do expect the market to do even better.”

All of the parties in the government are fully supportive of improving foreign investment and easing red tape for foreign investors.

There is also much anticipation that the government will provide quick incentives to stimulate the local property sector as an engine of growth for the economy.