A pair of Thailand’s most famous retail brands, Central Group and Tesco, are teaming up to develop property in Thailand. The agreement will see Central Pattana Plc (CPN), the property and retail developer under Central Group, work with Ek-Chai Distribution System Co, the operator of Tesco Lotus in Thailand, reports local media.
The new joint venture company formed by Tesco and CPN will be called Synergistic Property Development Co Ltd and will allow the 2 companies to support business expansion. Each company will hold a 50% stake in the joint venture agreement and comes after Tesco had been looking to get into the real estate business for the past few years.
“The new company will be set up to expand business in the future. Details of the business model to be developed under the new company are under study,” says Nattakit Tangpoonsinthana, CPN Executive Vice-President for Marketing, to the Bangkok Post.
One potential development from the new company could be a serviced apartment project at Tesco Lotus’s current location on Rama 4. However Tesco has not confirmed these plans and no details as to what the joint venture has in the pipeline were announced.
CPN is already active in real estate development, but the deal will allow both to have a larger reach in the property sector. Property development will also allow Central Group and Tesco to earn more sales and profits outside of the heavily competitive retail sector. For CPN, the decision was part of a strategy to rapidly expand its real estate business in the coming years,
CPN is looking to launch 2 condo projects in 2018, 2019 and 2020. Each project is likely to be a high-rise condo that contains around 400 units. The company is confident in the Thai property market despite high competition in Bangkok and flagging demand in certain segments.
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