Tokyu Land aims growth with One Origin starting with $108 mil Bangkok building

06, Aug. 2021

One Phayathai (R) will house two hotels, offices and shops and situated next to a luxury condominium, Park Origin Phayathai (L), in the city-center of Bangkok. (Photo: Origin Property)
One Phayathai (R) will house two hotels, offices and shops and situated next to a luxury condominium, Park Origin Phayathai (L), in the city-center of Bangkok. (Photo: Origin Property)

By Valaiporn Chalermlapvoraboon

BANGKOK, NNA - Tokyu Land Asia Pte Ltd has partnered a leading Thai condominium developer to build a 31-storey commercial building housing two international hotels, offices and shops in the bustling city center of Bangkok.

Called "One Phayathai", the 3.6-billion-baht ($107.88 million) development will feature Hotel Indigo and Holiday Inn Express of the InterContinental Hotels Group as well as shops and offices taking up 2,200 square meters of space when construction is completed in the fourth quarter of 2023, said Tokyu Land Asia's local partner, One Origin Company Ltd.

The partners are expected to seek further collaboration in businesses that generate recurring revenue, such as hotels, serviced apartments and retail.

Taking up a 51 percent share in the venture, One Origin, a subsidiary of Origin Property Public Company Ltd, is well-known in the past decade for building stylish condominiums conveniently located near stations of Bangkok's BTS rail network. It ventured into hotels recently.

One Phayathai will emerge alongside Origin's latest swanky condo development, Park One Origin, forming a new landmark with green facades, in the Phayathai district.

Both developments will have lush greenery and sustainable features, apart from being built with consideration for the environment.

Well-connected to the capital's two airports, One Phayathai is just a walking distance to Phayathai interchange station of BTS Green Line and the Airport Link to Suvarnabhumi and Don Mueang airport.

Also located nearby are the King Power Complex, a duty-free shopping mall popular with tourists, and the historic Victory Monument.

Masaoki Kanematsu, who was managing director of Tokyu Land Asia till end-June, said the joint venture was his company's first-ever investment in Thailand after searching for the right partner for years.

"The company is pleased to have Origin Property as its partner as it is well-known for its reliability and has a good reputation in the industry," said Kanematsu, who had joined another subsidiary of the parent company.

Tokyu Land Asia, which has a 49 percent stake in One Phayathai, is a property development and investment arm of Japan's Tokyu Land Corp., a real estate giant.

Kanematsu said the collaboration with Origin will see knowledge sharing between both companies and pave the way for potential partnerships in rising sectors in Thailand such as logistics and renewable energy.

Peerapong Jaroon-ek, CEO of Origin Property Public Company Ltd, said both companies will share expertise in sustainable development and environment-friendly designs to raise standards as they "aim to expand their recurring income business in Thailand".

Both parties are hopeful that tourism and business travel will fully return by the end of 2023 when the two hotels open their doors. With each offering more than 200 rooms, Hotel Indigo is a boutique brand with frills and flavors reflecting its locality, while the more affordable Holiday Inn Express will cater to the budget-conscious.

In all, Origin Property had developed 86 housing and condominium projects with a total value of 134 billion baht.

Last year, the company reduced its condominium launches as the industry faced a glut with many unsold units. As the COVID-19 pandemic spread, building activity fell across the country.

Throughout the years, the construction industry has played a significant role in Thailand’s economy, accounting for 8.1 percent of the GDP, according to Krungsri Research.

In 2020, total construction spending likely rose by only 1.5 percent to 1.321 trillion baht, propped up by the 5 percent growth in public sector spending while private sector spending contracted by 3 percent.

The increase was largely driven by public projects such as ongoing work on mega projects.

"However, private-sector spending shrank with the wider contraction of the economy, triggered by the COVID-19 crisis and the need to impose strict measures to control the spread of the virus. This had severely reduced construction contracts for residential property in the Bangkok metropolitan region and major provincial centers, as property developers postponed new projects, consumer spending power weakened, and lenders tightened the release of new credit," said Krungsri.

The construction industry is expected to recover over the next three years with total construction spending forecast to rise by 4.5 to 5 percent in 2021, and then by 5 to 5.5 percent in 2022-2023.

It will still be driven by public-sector spending on huge infrastructure projects, especially in the Eastern Economic Corridor provinces.

Krungsri expects the gradual recovery of the Thai economy to boost investment in residential and commercial properties.