The new phase of expansion follows the appointment of financial consultants Asset Pro Management (APM) Co Ltd to prepare Kata Group Resorts, owner and operator of six resorts in Southern Thailand, for listing on the stock exchange, said a release issued by Kata Group today (July 20).
“With a listing expected in 2017, Kata Group will embark on a period of significant growth fuelled by extra capital, including developing a hotel and community mall in Phuket called The Landmark Patong, as well as projects in established tourism areas in Pattaya and Hua Hin,” said the release.
The move to raise funds through a real estate investment trust (REIT) next year, before launching an initial public offering (IPO) in 2017, is to fuel the expansion, Kata Group’s vice president Tunyaratt Achariyachai told DealStreetAsia. (See story here).
“We plan to establish four more hotels in Phuket and Phang Nga. The first project is a 1.5-billion-baht Patong Landmark Hotel and Plaza, which will become a new landmark in Patong beach in Phuket. This project is scheduled to start construction in September and complete by the end of next year. It will also be the first asset that we will turn into the trust next year,” she said.
Of the remaining three projects, two will be hotels on Kata beach – one of which may be a joint venture with a well-known hotel chain, and the other one will be a combination of hotel and community mall in the Phuket Town, said the report.
“We will invest in those projects one by one because we don’t want to shoulder too much financial burden. Initially, we will focus in Thailand. We plan to expand into neighbouring countries such as Vietnam and Myanmar after the IPO,” Mrs Tunyaratt said.
The company expects to gain at least B500 million from selling the asset to the REIT next year and hopes to raise around B1-2bn from the IPO, reported Somphob Sakpanpanom, chief executive officer of Asset Pro Management.
“We are in the process of organising subsidiaries and restructuring the organisation, which should be completed this year. After this, we will prepare for the REIT and submit the first filing to issue IPO in early 2017,” he said.
Last year, the group made a revenue of B1.05bn and a net profit of B57mn, up 15 per cent year on year, reported DealStreetAsia.
Kata Group Resorts President and Owner, Mr Pramookpisitt Achariyachai, said he was encouraged by the growth of Thailand’s tourism sector and the increasing number of attractions, which was driving the growth of the hospitality industry.
“We feel we still have a lot of room to grow,” he said. “We currently own and operate six hotels in absolute beachfront locations – with one a two-minute walk from the beach – featuring concepts in the four- and five-star categories, appealing to a wide range of target groups and markets from around the world.
“Our strategy has always been to grow steadily and sustainably. This will not change. We have a strong project in The Landmark Patong and are seeking opportunities in Pattaya and Hua Hin, for which we need capital to fund the growth. This is why we have appointed financial experts in Asset Pro Management to achieve this goal.”
Investment in the hotel business in Phuket continues to increase. As of December 2014 there were a total of 46,803 rooms in registered tourism establishments for 750 hotels, according to C9 Hotelworks and the Tourism Authority of Thailand.
“With the development of infrastructure and services, such as the expansion of the new airport, the Asean Economic Community and Thailand’s convenient geographical position between the three mega markets of India, China and Indonesia, growth is expected to continue,” said Kata Group CEO Mr Pramookpisitt.
In 2012, Kata Group launched the Beyond Resorts brand, with luxury adults-only concepts at Beyond Resort Khaolak, Beyond Resort Karon and Beyond Resort Krabi, featuring pool villas and other experiences curated for couples, led by private dining, couples treatments at Kanda Spa and destination excursions.
Beyond Resort Krabi also caters to families, building further on the family heritage of the resort group with star performers Phuket Orchid Resort and Kata Beach Resort and Spa in Phuket and Kandaburi Resort & Spa in Koh Samui.