Pace and IBC place massive bet on luxury

MahaNakhon will be tallest Thai building.

The Thai property firm Pace Development and its Israeli investment partner, Industrial Buildings Corporation, plan to sell their two joint ventures into property funds worth 5 billion baht to raise funds for future investment.

The two joint-venture firms hold the hotel and retail assets of MahaNakhon, a luxury mixed-use project located on a nine-rai leasehold site near the Chong Nonsi BTS station in Bangkok, said Sorapoj Techakraisri, chief executive of Pace.

The 77-storey, 310-metre property will become Thailand’s tallest building, surpassing the Baiyoke Tower in Pratunam by six metres.

Pace Development and IBC set up three joint-venture firms to develop each part of the 18-billion-baht project, comprising a condominium, hotel and retail space.

Mr Sorapoj said sales of the condominium, with the Ritz-Carlton luxury hotel group as its sales agent, would start by the year-end after the completion of a three-storey show unit costing 200 million baht.

It expects to generate sales of 50% by the first quarter 2010. But if sales exceed expectations, the property funds could be set up before 2011 and new projects started.

The condominium will have 200 units with 150 different types. Sizes will range between 125 and 830 square metres, the latter being whole-floor units. Prices start from 250,000 baht per sq m, or between 30 million and 300 million baht a unit under 99-year leasehold contracts.

“After sales reach 50%, we will freeze sales and see new pricing opportunities,” Mr Sorapoj said, adding that the current prices represented a margin of at least 25%.

Pace and IBC yesterday introduced the conceptual project design created by the architecture firm Office for Metropolitan Architecture (OMA).

OMA partner Ole Scheeren, who was personally in charge of the CCTV Building in Beijing, described the design as a three-dimensional ribbon of pixels spiralling up the tower, which would be both impressive to look at and exciting to live in.

Pace’s in-house architects would continue the rest of the design work, while interior design would be handled by the UK-based David Collins Studio, said Mr Sorapoj.

“It will be a new Bangkok landmark,” he said.

Construction is due to start by the year-end and will be completed in 2012. Four financial institutions would jointly offer a total credit line of 7 billion baht, said Mr Sorapoj.