CPN expects slower growth in rental revenue (CENTRALPLAZA LADPRAO)

Central Pattana expects revenue growth at its shopping mall chain to drop to 8-9 per cent this year with the six-month closing of Central Plaza Lat Phrao for renovations.

Executive vice president Nattakit Tangpoonsinthana said yesterday that revenue growth at the company averages 20-25 per cent a year on rent increases and store openings.


But this year the company will lose income when the Lat Phrao branch is shut from April-October. The company also has no plans to open more branches this year.


However, next year revenue will return to average growth because the company will raise rents at Lat Phrao by at least 20 per cent when the plaza reopens in October and it will also expand with new stores.


Central Plaza Lat Phrao has total retail space of 180,000 square metres, accounting for 13.8 per cent of Central Pattana's total of 1.3 million square metres. Among the group's properties, Lat Phrao ranks second in terms of shoppers, following CentralWorld.


The budget to renovate Lat Phrao is Bt2.4 billion.


The company has also set aside a marketing budget of Bt700 million to hold more than 1,000 events at all its shopping centres this year.


The first event will be a celebration of Chinese New Year's and Valentine's Day, running from February 4-March 4 at all of its branches. The joint celebration will use up Bt100 million of the annual budget.


The campaign is expected to increase customer visits by 15-20 per cent and retail sales by 20 per cent, he added.

Lat Phrao facelift may halve CPN gains

Central Pattana Plc (CPN), the SET-listed property and retail development arm of the Central Group of Companies, expects its revenue this year to grow by 8-9%, lower than the double-digit rate last year because its Lat Phrao branch will be closed for six months for renovation.


Central has formed a business alliance with the Tourism Authority of Thailand and companies in the hotel, hospitality and food and beverage businesses in its Chinese NewYear Sales 2010 campaign.
As well, the company will open no new retail outlets this year, said Nattakit Tangpoonsinthana, executive vice-president for marketing.

CPN will close the 30-year-old Central Plaza Lat Phrao and start renovating it in April. It will reopen in October, in time for the peak sales season of the year. The company plans to spend 2.4 billion baht to renovate the complex, under a "green design" concept.

"Central Plaza Lat Phrao has total retail space of about 180,000 square metres or about 13.8% of CPN's total retail space. It contributes the second highest sales and shopper numbers to CPN, after CentralWorld," he said.

The rental fees at Central Plaza Lat Phrao are more than 2,000 baht per square metre per month but CPN will increase rents by 15-20% after the facelift.

Mr Nattakit expects its sales will grow by 20-25% on average again in 2011 after the renovation of Central Plaza Lat Phrao and the opening of new stores.

Though its sales will grow by a single-digit rate, the company will spend about 700 million baht on its marketing budget this year, on par with last year's level. It will join with partners in more marketing events, aiming to raise the number of events at all Central outlets by 15% from last year's 1,000 events.

The company yesterday announced it would form a business alliance with the Tourism Authority of Thailand and companies in the hotel, hospitality and food and beverage businesses in its Chinese New Year Sales 2010 campaign.

Of the total 700-million-baht marketing budget, about 100 million baht will be spent on the Chinese New Year campaign which will be held from Feb 4 to March 4, at all of its branches.

Shares of CPN closed yesterday on the Stock Exchange of Thailand at 19.80 baht, down 40 satang, in trade worth 42.5 million baht.

CentralPlaza Lardprao opened in 1982 and was the first shopping mall of Central Group, Thailand's largest retail corporation.

CentralPlaza Lardprao

Closure of CentralPlaza Lardprao

Central Pattana the mall developer, Central Department Store and Centara will all renovate the mall, convention center and hotel with a total cost of 4.3 billion baht (€86 million).

Central Pattana Public Company Limited has operated Central Lardprao for more than 30years, CPN will renovate the building to enhance the systems for a long-term operation, as well as, to modernize both interior and exterior so that it can continuously sustain tenants' and shoppers' satisfaction and also support the continuous growth of the project for the long run.

The investment cost for this renovation is approximately Baht 2,100 million.
The shopping mall will be closed for renovation from the end of April - October 2010, totaling of 6 months. The Board of Directors has considered that closing the entire shopping mall for renovation is safer for the tenants and shoppers. In addition, the renovation can be completed faster in this matter. The office building is still opened. However, it will be partially renovated for the period of 6 months,
starting the end of April - October 2010.

Shopping Plaza renovation
Listed mall developer Central Pattana Plc will increase its renovation budget for CentralPlaza Lardprao by 80% to 2.5 billion baht. CPN's investment for the Lardprao branch does not include budgets for other Central business units, such as Central Department Store and Centara Hotels & Resorts, said president Kobchai Chirathivat.
On September 30, the board of the SRT extended the lease to Central Group for its shopping center and hotel for 20 years. President Kobchai Chirathivat said design work mall would take about five or six months. The renovation would then take about a year and would be completed without closing the mall. Kobchai said the renovation of CentralPlaza Lardprao will begin in the first quarter of 2010 and is expected to be completed by the end of 2010.[6] Central Lardphrao's renovation will centred around the "Eco Trend" and "Modern Green" concepts. Materials used will evoke a natural ambience and new skylights will increase natural light in the mall, the company said. "After the transformation, the complex will appear more modern and sophisticated and will be the lifestyle hub for northern Bangkok," said Mr Kobchai.


Central Departmentstore renovation
Central Department Store will invest Bt2 billion in overhauling existing stores from 2009 to 2011, including Bt900 million on the Lat Phrao branch. Its president Yuwadee Chirathivat said the overhaul would raise the company's growth at a time when no new branches were on the cards.


Sofitel Centara Grand renovation/convention center
Central Group will also spend Bt700 million-Bt800 million to renovate one of its flagship hotels, the Sofitel Centara Grand and Bangkok Convention Centre.

CentralPlaza Lardprao

Central Plaza Lardprao is a shopping mall on Phahonyothin Road at the end of Lat Phrao Road in Chatuchak district, Bangkok. The mall opened in 1982 and was the first shopping mall of Central Group, Thailand's largest retail corporation.

Overview
The mall has a total of seven floors with a basement floor included. On the top floor is a food court selling different types of food from Thai food to international food. Further, there are international food restaurants as McDonald's and Starbucks. The shopping mall and Sofitel CentralPlaza complex also houses
Bangkok's first convention center. The hotel features more than 600 rooms and six restaurants. In front of the mall is an outdoor market selling such items inexpensive watches and clothes.

Central Plaza Lardprao is the largest source of income for the Central Group, accounting for 27% of its revenues in 2004.[3] Plans have been made to expand the mall, with Central wants to buy Hor Wang high school next to the mall with a 23 rai plot of land.[4] The mall is built on land leased by Central from the State Railway of Thailand (SRT), and the lease has been the subject of disputes.[5]