(Adds executive and investor comments)
By Chayut Setboonsarng
BANGKOK, Oct 16 (Reuters) - Central Pattana Pcl, Thailand’s largest mall operator, will invest 22 billion baht ($722.97 million) by 2022 in new projects and store renovations, a top executive said on Wednesday, despite a slowing economy and growing popularity of e-commerce in Southeast Asia’s second-largest economy.
The expansion will extend the company’s retail reach further outside the capital just months after it announced the 36.7 billion baht Dusit Central Park joint venture project in Bangkok with Dusit Thani Pcl.
Investments will be in three new projects in towns and cities outside Bangkok - Ayutthaya, Si Racha and Chanthaburi - Chief Development Officer Chanavat Uahwatanasakul said in a statement.
The company’s investments in regional developments have a total project value of 13.9 billion baht and includes malls, hotels and convention centres to draw in locals and tourists, Deputy Chief Executive Officer Wallaya Chirathivat told reporters at a briefing.
CPN, owned by the billionaire Chirathivat family, will also invest in two major re-developments of malls in Bangkok, with a total value of 3.1 billion, and renovations at 12 other locations, Wallaya said.
“Our investment strategy is driven by principles of tourism, infrastructure and trading,” she said, adding that the investment plans were in line with government policy.
In August, the company opened a 5 billion baht luxury outlet mall near Bangkok’s Suvarnahbumi airport to tap tourism revenue.
Investors like CPN’s mall locations outside the competitive city centre.
“We invest in trusts like CPN’s real estate investment trust (REIT), which includes malls on the city outskirts,” Principal Asset Management chief investment officer Win Phromphaet told Reuters, adding that malls have adjusted to include more activities such as fitness and dining to draw in visitors.
Prices for the CPN Retail Growth Leasehold REIT are up 45% year-to-date.
“E-commerce will impact the sellers, but the malls are landlords,” Win added.
E-commerce retail in Thailand reached 433 billion baht in 2017, up 25% from a year earlier, according to government data. ($1 = 30.4300 baht) (Reporting by Chayut Setboonsarng; Editing by Subhranshu Sahu and Alex Richardson)