Competition has been heating up in Thailand’s real estate industry, with incumbents, including both listed developers and smaller, non-listed firms, turning to merger and acquisition strategies. The Nation reports that, as of late, there has been much M&A activity, with deals totaling nearly THB 13 billion since December 2013.
Property Perfect Plc announced a takeover deal with Thai Property Plc worth up to THB 3.9 billion. If completed by the end of this year, Property Perfect’s assets would increase 47 percent, from THB 30.66 billion to 45.22 billion; its equity would nearly double, from THB 8.64 billion to 16.39 billion.
Chainid Adhyanasakul, CEO of Property Perfect, expressed, “We [bought a listed developer as we] wanted to survive the market competition after the country’s two beverage tycoons, Charoen Sirivadhanabhakdi and Santi Bhirombhakdi, expanded their investment in the industry.”
He was referencing Mr. Bhirombhakdi’s acquisition of a major stake in Rasa Property Development Plc for THB 8 billion, and Mr. Sirivadhanabhakdi’s takeover of Univentures Plc and Golden Land Property Development Plc two years ago.
During this period of tough competition, DBS Vickers (Thailand) Securities said M&A activity would be the market trend not only in the property sector, but for all companies. It offers a way to drive business growth and provide a back-door listing in the SET. Small and medium-sized listed property developers also have the potential to merge with either listed or non-listed real estate companies, as this would quickly boost their market share and enable them to be more competitive. The latter is exemplified by the recent Chewathai Co., Ltd. acquisition of Rojtaj Development Co., Ltd. for THB 1 billion.
At present, Thailand’s top 10 residential developers now possess over 70 percent of a market valued at some THB 600 billion a year.
