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MBK Plc, the operator of MBK shopping centre, plans to spend 6 billion baht to expand its retail and property business in 2012-14.
Some 2 billion baht will be spent each year to develop mainly property and retail projects both in Bangkok and upcountry. Funding will come from the company's cash flow and bank loans.
MBK currently has 500 rai of land pending for new project developments, including community malls, with 300 rai in Phuket and the remaining 200 rai in Pathum Thani.
CEO Suvait Theeravachirakul said more investments in the property business will double the revenue contribution of this area to 10% of the company's total revenue over the next three years.
In addition, MBK is set to further expand its financial business, which contributes 15% of total revenue. Its financial business includes Thanachart Bank, Thanachart Leasing, Thanachart Life Assurance, Thanachart Insurance, Thanachart Securities and Thanachart Fund Management.
MBK's revenue in its last fiscal year ended June 30 was 8.3 billion baht. Of the total, 30% came from retail, 29% from the packed-rice business, 15% from the financial business, 18% from hotels, 5% from residential and 3% from golf courses.
"More expansions in property and financial businesses will help us reduce business risk," Mr Suvait said.
For its 2-billion-baht investment budget next year, one billion will be used for a six-rai condominium project on Ratchadaphisek Road. The building will have 400 units with prices set at 2-3 million baht each. Construction will begin in early 2012 after the government clears up its policies on the daily minimum wage increase.
The remaining one billion baht will be spent on extending The Nine neighbourhood centre on Rama IX Road.
Mr Suvait said MBK is conducting a feasibility study for the nine-rai plot next door to The Nine. It could potentially be developed into condos, a car care centre or restaurants to increase customer traffic to the shopping centre.
The Nine neighbourhood centre, built to replace the Premier Praram 9 retail project at a cost of 1.2 billion baht, has been open for a few months. It has gross space of 34,400 square metres and parking for 800 cars.
The Nine is predicted to attract 12,000 daily shoppers. MBK expects to break even from the mall within six years and is targeting monthly income from the project of 14 million baht.
MBK shares closed yesterday on the SET at 98 baht, down 25 satang, in trade worth 1.82 million baht.