Property ventures on track

Royce Residences - Sukhumvit

Royce Residences - Sukhumvit

Two property developers, Major Development Plc (MJD) and Ananda Development Co Ltd, have insisted that their joint ventures with the leading insurance firms AIG and Prudential are safe from the global financial crisis as the funds were raised in Asia.

MJD president Suriyon Poolvoralaks said his company’s subsidiary MJAI Development Co had been formed by a joint venture between MJD and AIG Global Real Estate Investment (Asia) early this year.

He said funds were raised by AIG in Asia for investing in the real estate market in Asia, including Thailand. MJAI has already invested in Royce Private Residences as its first Thai residential project and further investments may follow, he said.

The three-billion-baht Royce Private Residences, with 165 units on a three-rai site on Soi Sukhumvit 31, has been financed by Tisco Bank and the contractor Seafco began piling work on the site this month.

Mr Suriyon said the project was on schedule and a mock-up room and sales office should be open in October.

He added that the AIG fund was “very positive” about the Thailand market and was willing to invest more, although it had already completed its investment in Royce at the start of the project.

Ananda Development Co chief executive Chanond Ruangkritya said its subsidiaries Ananda Development One Co Ltd (Ananda One) and Ananda Development Two Co Ltd (Ananda Two) were joint ventures with TMW Asia Property Fund I operated by Primerica Real Estate Investors, the real estate investment advisory business of Prudential Financial Inc. “Though they [the joint ventures] are descended from US-based Prudential, TMW’s funds are raised from investors in Asia. Most are pension and oil funds,” he said.

“Prudential is very conservative and not in the business of guaranteeing collateralised debt obligations (CDOs), which caused the global credit crunch and the crisis for Lehman Brothers.”

Mr Chanond - who has worked for Lehman Brothers in Singapore, Hong Kong and Thailand - suggested Prudential might find an opportunity in the current financial crisis to take over Lehman Brothers’ Thailand assets for TMW.

Of TMW’s current investment portfolio, he said around 50-60% was in Japan and only 5% in Thailand.

To date, TMW has injected 70 million of 100 million that it has committed to supporting Ananda Two, which focuses on high-rise residential development near mass transit. The remaining 30 million will be paid this year for further scheduled condo projects, he said.

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About the author

Kanana Katharangsiporn Kanana Katharangsiporn
Kanana Katharangsiporn is a senior journalist with The Bangkok Post, Thailand's first English language newspaper and specialises in property and real estate areas.
Other posts by Kanana Katharangsiporn ( 27 )
Website: http://www.bangkokpost.com/

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