Klang Plaza Co, one of the oldest retailers in Nakhon Ratchasima province, is set to spend 8.5 billion baht to expand its retail empire and property business to guard against cash-rich operators from the capital.
Some 5 billion baht will be spent to develop a condo and retail project on 160 rai in Korat, while 3.5 billion is to develop a newretail project and renovate three department stores.
Bangkok property developers are flocking to northeastern provinces, especially Nakhon Ratchasima, commonly known as Korat, said Paijit Manasilp, Klang's assistant managing director.
About 5 billion baht will be spent to develop multi-purpose projects including a condominium and retail project on 160 rai in Korat from 2013-17.
The remaining 3.5 billion baht will be used to develop a new retail project and renovate three department stores.
Of the 3.5 billion baht, 2 billion is set aside to build the fourth Klang Plaza retail complex on 25 rai owned by the State Railway of Thailand. Klang has agreed a 30-year lease for the land.
Design of the new project is under way and construction could start next year, with completion taking two years.
About 1 billion baht is earmarked for renovating the company's 22-year-old Klang Plaza branch on Jomsurang Road. The remaining 500 million will go to renovating its store on Asadang Road.
Paijit: All roads run through Korat
"Funds will come from the company's cash flow and bank loans," Mr Paijit said.
Klang along with several upcountry retailers in Khon Kaen and Nakhon Sawan provinces survived Thailand's major financial crisis in 1997.
Its investment this year is its largest in the past two decades thanks to the booming property sector in Korat, which has attracted investments from both Thailand and overseas.
"As the gateway to Laos, Cambodia and Vietnam, Korat will be a prime destination to attract more businesses from abroad," Mr Paijit said.
The government's high-speed train project, which puts Nakhon Ratchasima as the key junction, will make the province more attractive.
"A number of manufacturers have relocated their operations to Korat and that means a high number of consumers on top of about 2.6 million residents in the province alone,"said Mr Paijit.
Major retail players in Korat include The Mall, Tesco Lotus, Big C and Makro. Central Pattana Plc is expected to dust off its project that was postponed several years ago due to a slow economy.
Klang started to renovate its nine-storey Klang Plaza in Jomsurang Road last month and is expected to complete the work in August next year.
The company also operates its own supermarket chain and bookstores under the Klang Market and Klang Ploen brands.
"We want to develop our own brands and branch out to cover the Northeast region in the future," Mr Paijit said.
Klang expects sales this year of 1.5 billion baht, the same level as last year, because of the renovation of its flagship store on Jomsurang Road.
It expects retail sales to climb to 3.5 billion baht by 2017.
About the author
- Writer: Pitsinee Jitpleecheep
Position: Business Reporter