[Vnbiz] Thai mall operator to expand in Vietnam

[Phan, Tai]

Thai mall operator to expand in Vietnam
By Anuchit Nguyen and Haslinda Amin 
Bloomberg NewsPublished: July 2, 2007


BANGKOK: Central Pattana, Thailand's biggest mall operator, plans to build three outlets in Vietnam and China, its first overseas expansion, to tap rising consumer spending in two of Asia's fastest-growing economies.

The developer will build malls in Hanoi and in Ho Chi Minh City, the chief financial officer, Naris Cheyklin, said in an interview. It will also build a mall in China, Naris said, without giving details on the size or location of the investment.

Central Pattana's first-quarter profit dipped 9 percent after the Bangkok-based company was forced to reduce rents at some of its 10 shopping malls in Thailand, where consumer confidence is at a five-year low after falling in 15 of the past 17 months.

"Expansion in Thailand will slow in future because of the saturation of the market, so we think we should find a place to grow," Naris said. Vietnam and China "are countries whose economies are growing very fast."

Central Pattana, controlled by the Chirathivat family, aims to double annual sales to 15 billion baht, or $434 million, in 2010 by building malls in the capital and provinces of Thailand. The company is spending about 18 billion baht on four Thai shopping malls by 2009. Naris did not say how much the company might spend in Vietnam.

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 "There is no doubt about the growth potential in Vietnam," said Chaiyatorn Sricharoen, an analyst at Bualuang Securities, which has a "hold" recommendation on Central Pattana shares. "For China, there are a lot of risks because of high competition."

The Chinese retail property market is oversupplied with poor-quality shopping centers, Morgan Parker, president of Asian operations at Taubman Centers, the U.S. operator of luxury malls that is developing property in Macao and South Korea, said June 21.

Central Pattana is also studying a plan to sell shares in a real estate investment trust to domestic investors, Naris said.

The funds raised in the sale would help finance construction of the company's new shopping malls in Thailand, said Naris.

The property trust may also be backed by some of the company's office buildings, he said.