Published April 12, 2007

Thai tycoon buys 4 floors at Orchard Residences

Charoen pays $135m or about $3,600 psf, targets more acquisitions


THAI tycoon Charoen Sirivadhanabhakdi, who recently purchased 47 of the total 48 apartments at Hoi Hup's Suites @ Cairnhill for $205 million or about $2,550 per square foot (psf), has also bought four floors (with 16 apartments) at the Orchard Residences condo for $135 million or around $3,600 psf.

And the tycoon, who also purchased the Intercontinental Hotel at Bugis Junction for about $250 million last year, is on the lookout for more property acquisitions in Singapore, particularly hospitality-related assets like hotels and serviced apartments.

'Interest in the hospitality sector is quite buoyant because of the integrated resorts coming up. The problem is there are no sellers,' Chia Kwok Ping, president of Mr Charoen's TCC Land International, which sources property investments for the tycoon, told BT yesterday.

He added that the group was also open to purchasing more apartments or commercial buildings if the opportunities presented themselves.

'We're pretty flexible. The key is, we have the funds. And that's also a strength of ours,' he said.

'We are confident of the economy here and prepared to put more money in this place,' said Mr Chia.

Mr Charoen is also looking at exit strategies, around three to five years down the road, particularly for the hospitality assets he has been buying. A hospitality real estate investment trust (Reit) could be an option, Mr Chia reckons.

Besides the Intercontinental in Singapore, the Thai tycoon also bought Westin Kuala Lumpur, Sol Melia in Hanoi, a hotel in Laos, two hotels in Kunming, China, and a hotel in Kensington, London - all last year.

In all, he inked deals totalling about US$500 million for property acquisitions outside Thailand in 2006.

Mr Charoen, who controls TCC Group and Singapore-listed Thai Beverage, made the latest acquisition of the 47 apartments at Suites @ Cairnhill through his privately held vehicle Pacific Coast Assets.

Mr Chia said that the 48th unit was bought by an unrelated party. As a foreigner, Mr Charoen is not allowed to buy an entire block of apartments, Mr Chia explained.

'We will rent the apartments after they are built, and be opportunistic about releasing them for sale at the right time.

'We're quite bullish about the market and think areas like Cairnhill can achieve $3,000 psf soon,' Mr Chia said.

As for the 16 apartments that Mr Charoen has bought on the upper floors of the Orchard Residences above Orchard MRT Station, 'we'll probably keep a couple of units for own use, and rent out the rest for investment purposes', said Mr Chia.