Thailand’s Asset World Corporation (AWC) has set up a new joint venture company with an unnamed investor believed to be Singapore’s sovereign wealth fund GIC.
On July 27, AWC notified the Stock Exchange of Thailand of the joint venture, AWC Hospitality Development, which is 51 per cent owned by AWC and 49 per cent by the investor. Both parties have agreed to jointly conduct its management as the joint venture is not classified as a “subsidiary” of AWC.
GIC is a shareholder of AWC – the hospitality, retail and commercial real estate group of Thai billionaire Charoen Sirivadhanabhakdi.
“The joint venture will invest in high-potential hospitality projects in Thailand’s key tourist destinations. The company (AWC) will leverage its strength as the leading lifestyle real estate developer, together with its network of world-class hotel brands and ability to strategically manage real estate effectively, to drive this joint venture,” AWC said in the filing.
“This collaboration marks the first of its kind that the company (has) partnered with (a) global institutional investor with expertise and experience in investment management. The collaboration is the new business model that will help the company to create the foundation for new sources of income, which are derived from management fees, including incentive fees based on project performance,” AWC added.
The types of hospitality projects are undisclosed but TTG Asia understands that the acquisitions, all in Thailand, are in progress and the first ones will be announced soon. As of press time, AWC and GIC have not responded to queries.
In its 2Q2022 analyst meeting presentation on August 11, AWC revealed that the joint venture would invest up to around US$300 million in those projects, and derive fee-based revenue from managing the assets.
Meanwhile, AWC reported a net profit of US$39 million in 1H2022, a 100 per cent increase from the same period last year. This was “driven mainly by strong growth in our net operating profit of more than 100 per cent from the Hospitality Business,” said AWC’s CEO and president, Wallapa Traisorat.
AWC’s luxury hotels, in particular, have benefited from Thailand’s reopening. The rise in the number of international visitors, along with the Thai government’s campaign to boost domestic tourism, pushed AWC’s RevPAR in 2Q2022 up by 302 per cent year-on-year, the company said. The Average Daily Rate rose 48 per cent year-on-year to almost reach pre-pandemic levels. The company’s business events segment grew considerably by 407 per cent year-on-year, contributing to the solid performance of the Hospitality Business.
The Retail and Commercial businesses also saw growth as people returned to malls and consumer spending increased. For example, visitor traffic to Asiatique The Riverfront Destination in Bangkok in 2Q2022 rose 220 per cent year-on-year.
Currently, AWC, which owns the largest hotel portfolio in Thailand, has 19 hotels with a total of 5,201 rooms in popular Thai destinations Bangkok, Pattaya, Hua Hin, Samui, Krabi, Phuket and Chiang Mai. The hotels are managed by international operators including Marriott International, Hilton, IHG, Banyan Tree Holdings, Okura, and Melia Hotels International.
AWC also recently announced the exclusivity to develop Nobu Hotels & Restaurants in Thailand in partnership with Nobu Hospitality, starting with a Nobu restaurant on the rooftop of its Empire Tower Bangkok, and a Nobu hotel in a yet-to-be-disclosed location in the capital.
AWC’s target is to double the number of rooms to 8,500 and increase retail space to 415,000m² from 165,000m² by 2024.
Its oft-repeated goal is to support the Thai tourism industry and economy by offering quality projects through working with strong global partners, with the aim to expand its customer base to middle- to high-income groups which are likely to grow in the near future.
This expansion will also deliver experiences that will attract tourists from across the globe to Thailand, AWC stated.